NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Mukesh Ambani
    WhatsApp
    Reliance Jio
    OPPO
    Vivo
    Sensex
    Bitcoin
    NewsBytes
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout


    India Business World Politics Sports Technology Entertainment Auto Lifestyle Inspirational Career Bengaluru Delhi Mumbai Visual Stories Find Cricket Statistics Phones Reviews Fitness Bands Reviews Speakers Reviews

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
     
    Home / News / Business News / Centre calls meeting with restaurant body over 'forced' service charge
    Business

    Centre calls meeting with restaurant body over 'forced' service charge

    Centre calls meeting with restaurant body over 'forced' service charge
    Written by Abhishek Hari
    May 24, 2022, 10:13 pm 3 min read
    Centre calls meeting with restaurant body over 'forced' service charge
    Restaurants normally charge 5-10% as service charge. Such charges are, however, voluntary and not mandatory.

    Following consumer complaints, the Department of Consumer Affairs (DoCA) lambasted restaurants for forcing consumers to pay service charges "often fixed at arbitrarily high rates." The DoCA has scheduled a meeting with the National Restaurant Association of India (NRAI) for June 2 over the matter. This comes after Consumer Affairs Secretary Rohit Kumar Singh recently raised the issue with the NRAI.

    Why does this story matter?

    • Notably, paying service charges is optional and voluntary. The DoCA's 2017 guidelines also state that a customer's entry into a restaurant doesn't constitute consent to pay service charges.
    • Moreover, the Consumer Affairs Ministry recently stated, "The meeting [with the NRAI] follows...the DoCA taking notice of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH)."

    What did Consumer Affairs Secretary say to NRAI?

    In a letter to NRAI, Singh wrote, "Since this issue impacts consumers...on a daily basis and has significant ramifications on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail" He said consumers are also being misled about the legality of service charges and restaurants are harassing customers who request such charges be removed from their bills.

    Issues to be discussed during meeting with NRAI

    The DoCA is expected to raise four major issues during its meeting with the NRAI. These include consumer complaints over eateries making service charges mandatory; disguising service charges as another fee or charge; concealing from customers that service charges are voluntary; embarrassing consumers if they refuse to pay service charges. Notably, restaurants typically charge a 10% service charge on top of the total bill.

    NRAI responds to government's concerns over customer complaints

    Meanwhile, NRAI President Kabir Suri has stated that most customers are willing to pay service charges while adding most restaurant menus mention that it is discretionary. "The levy of service charge by a restaurant is a matter of individual policy to decide if it is to be charged or not. There is no illegality in levying such a charge," the NRAI said on Tuesday.

    What does the law say?

    To recall, under the Consumer Protection Act, any restriction on consumer entry by mandating them to pay a service charge as a requirement for placing an order is considered a "restrictive trade practice." According to the guidelines, the placement of an order by a customer constitutes their obligation to pay for only the prices showcased on the menu card and applicable government taxes only.

    Share this timeline
    Facebook
    Whatsapp
    Twitter
    Linkedin
    Latest
    Consumer Court
    Consumer Forum
    Ministry of Consumer Affairs

    Latest

    #NewsBytesExplainer: Understanding casting direction—meaning, importance, prominent examples Mukesh Chhabra
    Top 100 companies must verify rumors, says SEBI: Here's why  Securities and Exchange Board of India
    Here's why Chennai Super Kings can win IPL 2023 Chennai Super Kings (CSK)
    Mohammed Shami set to complete 100 wickets in IPL: Stats Mohammed Shami

    Consumer Court

    Zomato fined Rs. 55,000 for delivering chicken instead of paneer Zomato
    Bata charges customer Rs. 3 for carry-bag, fined Rs. 9,000 Chandigarh
    Online movie ticket-booking platforms cannot charge 'Internet Handling Fees': RBI India
    NCDRC asks SBI to allow widow access to monthly pension West Bengal

    Consumer Forum

    World Consumer Rights Day: History and 6 basic consumer rights Indian Government
    Doctor sues coaching-institute after failing to crack AIIMS-entrance, wins case India
    Cadbury fined Rs. 50,000 for bugs in Dairy Milk Andhra Pradesh
    Consumer court orders insurer to pay theft-claim for unlocked car Mumbai

    Ministry of Consumer Affairs

    Gold jewelry sale with HUID mandatory; 1-year jail for violation Central Government
    Onions retailing Rs. 100/kg in Mumbai, Pune; import norms relaxed Mumbai
    Delhi's tap water is most unsafe, Mumbai's best: Study Ram Vilas Paswan
    Explained: What is Centre's 'One Nation One Ration Card' plan Ram Vilas Paswan

    Love Business News?

    Subscribe to stay updated.

    Business Thumbnail
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2023