Maharashtra restaurants fleece customers, overcharge them under garb of GST

Of the 68 consumer complaints received by the state Legal Metrology Department (LMD) in the last one month over 90 per cent pertain to overcharging of food bills by restaurants.

Restaurants top the list of establishments that have been accused of overcharging customers under the garb of the Goods and Services Tax (GST) in the first month after the new tax regime came into effect.

Of the 68 consumer complaints received by the state Legal Metrology Department (LMD) from across the state in the last one month since GST was implemented on July 1, over 90 per cent pertain to overcharging of food bills by restaurants. The LMD is a consumer watchdog that is authorized to act against short delivery, excess demand and over pricing by unscrupulous businessmen or establishments.

LMD sources told HT on Thursday that a majority of the complaints against reckless billing by eateries had been received from Mumbai, followed by Pune, Aurangabad and Nashik, respectively. “These are the main urban hubs in the state which have a culture of eating out. It is natural that the exorbitant increase on food bill following GST is pinching the consumer more than the price rise on other items,” sources said, explaining the deluge of complaints against restaurants.

In a majority of complaints, customers alleged that while restaurants were earlier charging table charge along with Value Added Tax (VAT), service tax and service charge, the taxation has increased following the implementation of GST. “Now along with 18 per cent GST on food bill, some restaurants are also accused of including service charge and cooling charge (on chilled mineral water bottles and other aerated drinks),” an officer with the LMD said.

The cooling charge never existed before. “Restaurants have been accused of charging anything between Rs3-5 over the MRP on a bottle of mineral water served from a fridge,” the official added.

Some other complaints pertain to discrepancies in price of food items mentioned in the menu card and the composite tax levied afterwards.

“As per their (consumer’s) demand, the price of food items mentioned in the menu card should have included GST,” the official said, mentioning a consumer complaint.

President of the Indian Hotels and Restaurants Association, Adarsh Shetty meanwhile, said that the restaurants have no option but stick to the GST (over food bill) as per the requirement of the legislation.

However, keeping in view the burden on the customers following GST, restaurants should avoid charging service charge. “We have made an appeal to our members not to levy service charge. Some have adhered to our request, while some have not. We can only make an appeal,” he said. When asked about “cooling charge”, Shetty said, “I have never heard of it before. No one can levy such charge above MRP.”

Meanwhile, Controller, LMD, Amitabh Gupta said that the department would hold discussions with the GST commissioner for clarifications on the tax entitlements by restaurants before acting on the complaints.

“But one thing is clear, no one can charge anything over MRP,” he stated.

Meanwhile, the LMD is all set to initiate action against a super market in Thane which charged Rs3 over the MRP for one and half litres of packed milk as the customer bought it in the afternoon. “She(complainant) was allegedly told by the super market manager that she could have got the pack at MRP had she made the purchase in the morning. The Rs3 extra was for keeping the packet/s in the refrigerator.”