Service charge back on Pune menus
The beginning of the financial year, April, saw the return of service charge, as restaurants and pubs across the city began charging their customers for services rendered.
In 2017, the Department of Consumer Affairs had announced that it was up to the customers to pay or ignore the 'service charge'.
When quizzed about the decision, owner of Effingut Brewerkz at Koregaon Park, Manu Gulati said, “This year we have decided to reduce the price of food and drinks and add service charge so that there is transparency and the guests know what they are paying for.” The restaurant now charges an extra 7.5 per cent as service charge, along with Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST).
According to National Restaurant Association of India (NRAI), service charge is a fee charged by the restaurant over and above the price of food and drink for the additional convenience of service rendered inside the restaurant and not for take outs or home deliveries.
“It is an internationally accepted practice to ensure all customers are treated fairly and all members of the staff are aligned to ensure customer satisfaction,” said Vibhu Sharma, manager, group CEO’s office, Impresario Entertainment and Hospitality Pvt Ltd and owner of the recently launched restaurant, Social, in Pune.
“The levy of service charge, if mentioned on the menu, forms part of the price of goods and services rendered and by placing an order you are contractually bound to pay service charge,” he added.
According to National Restaurant Association of India (NRAI) officials, it is legal for restaurants to levy service charge and does not violate the provisions of Consumer Protection Act, 1986, if it is mentioned in the menu / price list and informed to the customer. Service Charge directly benefits the six million people employed in the industry. More than 60% employees in the industry depend on service charge to augment their income up to 30%. The Food and Beverage operators employ the service charge method to ensure that all employees are beneficiaries of service charge.
The Pune Restaurant and Hoteliers Association has asked restaurateurs to put up signs mentioning that service charge is levied by the restaurant. Kishore Sarpotdar, secretary, Pune Restaurants and hoteliers Association (PRAHA), said, “Service charge is optional and most of the high end or premium hotels are charging it. We have informed restaurants to clearly mention to the customers that they are charging service tax, if they are doing so. If it is clearly mentioned, then it is mandatory for the guest to pay. But there is no such rule.”
Customers though, are divided by the decision taken by restaurateurs across the city. A customer at Teddy Boy restaurant in Baner, Mayukh Ghosh, said, “Initially we had the option to not pay the service charge, but since Sunday we were told that the restaurant charges a mandatory service charge of 5 per cent."
Anirudha Deshpande, a foodie who endorses service charge, said, “There is no successful restaurant without happy customers and there are no happy customers without good service. I personally endorse service charge and I believe it must be paid. A customer should never refuse to pay the service charge after being clearly told that service charge will be levied.”