The Delhi High Court on Friday came down heavily on restaurants charging a service fee from customers while already selling products with a hiked MRP.
A bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela questioned why a service and ambience were not covered in the already high MRP charge in the name of experience, why there was a need to levy additional service charge from customers.
"You (restaurants) are charging more than MRPs, for the experience being enjoyed by the person visiting your restaurant. And you’re also charging the service charges for the service rendered... providing an ambience for certain kind of experience will not include the services you’re providing? This we don’t understand," the bench asked the counsel representing the associations for hotels and restaurants.
Citing an example of a ₹20 water bottle being sold for ₹100 at restaurants, the High Court bench asked the National Restaurant Association of India (NRAI) and Federation of Hotels and Restaurant Associations of India (FHRAI), why the eatery was not specifying that the extra ₹80 were for the ambience being provided.
"This can't be like this. This is an issue… Providing the ambience will form part of the services being provided by you... Can you charge any amount over and above the MRP? And for service you're charging, what's that 80 rupees for?" the bench was quoted as saying by news agency PTI.
The High Court's remarks come months after a single judge of the court held in March that service fee cannot be made mandatory by restaurants in a "camouflaged and coercive" manner, terming it unfair trade practice.
{{/usCountry}}The High Court's remarks come months after a single judge of the court held in March that service fee cannot be made mandatory by restaurants in a "camouflaged and coercive" manner, terming it unfair trade practice.
{{/usCountry}}The court had said in its March 28 order that being made to pay a service charge and Goods and Services Tax (GST) on top of the fee in the food bill comes as a "double whammy" for consumers.
(With PTI inputs)