Service charge still levied at restaurants across India? Yes, no, wait and watch
Although there is no provision under the existing law to take action against hotels/restaurants, consumers have the freedom not to pay the service charge. Here is how hotels and restaurants across the country are handling service charge and what consumers are saying.Updated: Jan 13, 2017 11:00 IST
Union consumer affairs minister Ram Vilas Paswan is clear that service charge on food and drinks is an unfair trade practice and people need not pay it. Although there is no provision under the existing law to take action against hotels/restaurants, consumers have the freedom not to pay the service charge. Here is the lowdown on how hotels and restaurants across the country are handling service charge and what consumers are saying.
Many restaurants in Hyderabad are still charging service charge. “This is mainly due to lack of clarity from the government,” says Manjulatha, a regular restaurant hopper.
In Tamil Nadu too, food and beverage establishments are insisting on service charge if they are displayed on the menu card and are intimated beforehand. An office-bearer of South India Hotel and Restaurants Association said, “Service charge is for those engaged in the back-end of the workforce. People at the front get tips… This is our considered stand and this is what we will take up at the national level too at a meet slated for Friday.”
In neighbouring Karnataka, service charge is still levied by many eateries. Madhukar Shetty of the Karnataka Pradesh Hotels and Restaurants Association said it would be withdrawn soon.
In West Bengal capital Kolkata, Bishal Saha, owner of restaurant chain Kasturi, said, “We never levied service charge.” Saha added he knew other restaurants had stopped doing it to avoid confrontation with customers.
Service charge is not being imposed in Chandigarh. The administration declared it illegal from April 1, 2016.
In Rajasthan, service charge is not levied on food bill. Hotel and Restaurant Association of Rajasthan president Kuldeep Singh Chandela said, “Charging service charge is optional and no restaurants in Rajasthan take service charge on food bill.”
In Lucknow, high-end restaurants are levying service charge.
With inputs from Hyderabad, Chennai, Bengaluru, Kolkata, Chandigarh, Jaipur, Lucknow
First Published: Jan 13, 2017 11:00 IST