Even as many restaurants in the city continue to illegally levy "services charges" on unsuspecting customers for years together, authorities are tossing the ball in each other's court as far as action against the erring businesses is concerned.
As per rules, service charge cannot be levied on food served at the table on a restaurant. Despite this, restaurants have been charging money ranging from 5% to 12% on the bill from consumers. Meanwhile, the UT administration and central excise department officials continue to shift responsibility on each other for taking action against such malpractice.
UT deputy commissioner-cum-commissioner of excise and taxation and consumer affairs, Mohammed Shayin, claimed that the matter was not under their preview and was the responsibility of central excise department.
On the other hand, central excise, customs and service tax commissioner SJ Singh maintained that the issue of levy of service charge did not fall under their jurisdiction. "It's the prerogative of the local administration to take a decision on service charge. We have nothing to do with it as we only deal with service tax," said SJ Singh.
Though the administration is now shrugging off its responsibility, it had declared the practice illegal way back in 2006 after a complaint was lodged by a city-based lawyer with the ministry of consumer affairs.
The lawyer, Ajay Jagga, had also taken up the issue during a public hearing by UT administrator Shivraj Patil on November 5.
Criticising the administration inaction, Jagga said that the question of jurisdiction did not arise since the practice had already been declared illegal in 2006.
Chandigarh hotel association general secretary Ashok Bansal maintained that it was unfair on part of restaurants to levy service charge on customers, especially when they were made to pay over 20% of the total bill under various taxes. "Authorities should look into the matter and make sure that such malpractice is stopped," said Bansal. He claimed that the practice was more prevalent among restaurants in Sector 26.
Legal notice served on restaurant
Last week, a Sector-17 restaurant was slapped with a legal notice for allegedly charging illegal service charge from Veer Bala Sehgal, a Sector 38 resident, who had gone at High Point with her family for dinner.
In the notice sent by Punjab and Haryana high court advocate Bhim Sen Sehgal, the complainant demanded refund of Rs. 307 reportedly charged illegally by the restaurant along with a compensation of Rs. 50,000 for indulging in unfair trade practice and on account of embarrassment meted out to her in front of other customers.