Delhi restaurant, hotel owners say service charge order will affect staff

The government on Monday issued a notification saying that service charges at restaurants and hotels are discretionary or voluntary and a consumer dissatisfied with the services can have it waived off. It also asked the state governments to direct hotel and restaurants to display this information at an appropriate place.

Restaurants and hotels in the national capital are upset with Union government’s move to make service charge discretionary. They said the move may affect the staff and the industry.

The government said that a dissatisfied customer can get service charge waived off on his food bill as it is discretionary.(Arun Sharma/HT FILE PHOTO)

The government on Monday issued a notification saying that service charges at restaurants and hotels are discretionary or voluntary and a consumer dissatisfied with the services can have it waived off. It also asked the state governments to direct hotel and restaurants to display this information at an appropriate place.

Inderjit Singh Banga, owner Pirates of Grill and Prankster, says he passes 80% of the service charge to the staff and keeps the remaining 20% for breakage of crockery and cutlery.

“We do give them salaries, but they need motivation, and service charge is a token of appreciation for hard work which encourages them a lot,” he says.

Saurabh Khanijo, owner, brand Kylin, says the move will harm the restaurant industry. “Unlike in foreign countries, people do not value services in India. They feel that service is their birthright. They may order food for Rs1,000 and may not leave even 10% as tip. We have always shared the whole service charge with our staff as it’s their incentive.”

Many like Shiv Karan Singh, owner of Smokeys BBQ and Grill, Circus, says that the idea of asking the customer if he wants to pay the service tax is impractical. “It’ll be difficult for our operations if we have to ask customers if they want to pay service charge or not,” says Singh.

But Manish Mehrotra, corporate Chef, Indian Accent, Friends Colony, said that if someone doesn’t like the service, he shouldn’t be forced to pay it. “But people shouldn’t misuse this move,” he added.

Priyank Sukhija, chairman of the Lazeez Affaire group that runs Flying Saucer, Lord of the Drinks among others, says that the government’s move will make it difficult for restaurants to hire good staff.

“It is already very difficult to get good staff. Service charge in a restaurant lures the staff. A lot of people get attracted to hospitality industry because of this,” he said.