From April 1, customers dining at various eateries in the city would not have to pay any service charge with the UT administration declaring the levy as illegal on Wednesday. UT deputy commissioner Ajit Balaji Joshi passed the orders — issued by the department if food and civil supplies — stating that service charge cannot be levied on food bills at hotels and restaurants, after the legal remembrance (LR) stated that service charge is illegal as it is not backed by any statute.
At present, several restaurants and hotels in Chandigarh are levying service charge ranging between 6% and 12% on total food bills claiming that it was meant to be distributed to the staff.
Those charging levy to be booked
The orders of the DC have been issued under Section 133 of the Code of Criminal Procedure (CrPC) that confer special powers to the issuing authority. This implies that if a complaint is received, there will be a direct registration of a case under Section 188 (disobedience to order duly promulgated by public servant) of the IPC.
Background and current practice
The levying of service charge has been an issue that has had residents approaching the administration for redress for long. On August 31, 2014, the administration had ‘told’ restaurants not to levy service charge.
Post this, the administration had issued another letter wherein it approved the levying of the service charge on the condition that the restaurants will have to pay VAT on the amount collected as service charge.