NEW DELHI: Next time you are done with a scrumptious dine in at a restaurant, watch out! Chances are that you might end up paying an overpriced bill.
You might be forced to cough up service charge, something the department of consumer affairs made discretional. According to the department one can skip the service charge levied by restaurants and hotels in case of unsatisfactory service. However, many fine-dine outlets have a put on show of a mandatory service charge board outside their restaurants, completely flouting the notification issued by Consumer Affairs department.
The statement was floated addressing to a number of complaints by consumers, stating that restaurants and hotels have been following the practice of charging service charge in the range of 5-20% in lieu of tips.
“The salary structure of the staff who is serving is based on this service charge. The statement rolled out by the department is so open ended in nature that is says pay or don’t pay. Then why can’t restaurants also have open-ended statements like you dine or don’t dine” said Udit Chawla, owner of Colony Bistro cafe in Amar colony.
However the empowered customer is now caught in a mere conundrum between the disputes of both the parties.
“The Information circulated by the government has created unnecessary confusion amongst the public regarding the levy of service charge. The inclusion of service charge has been recognized by various central/state government departments. A restaurant has every right to choose the levying of charge and similarly the customer has every choice to dine or not” expressed Prakul Kumar, Secretary General, National Restaurants Association of India (NRAI)
The Service charge is floated in addition to a 12.5% Value Added Tax (VAT) and 6% Service Tax, thus making the customer overly burdened. Being the largest revenue generator industry, the restaurants claim that the government is never ready to waive off taxes, but is adamant on service charge. According to the restaurant owners, service charge is a way of remunerating staff and also serving in terms of service and quality.
Foodie Aasim Zaidi, a college student expressed that “ Many a times, I have argued in restaurants for nonpayment of service charge, on being dissatisfied with the food quality or service, however the restaurant staff denied to waive off the charge from the bill, claiming that it is mandatory as a part of their personal policy”.
The move is denied by National restaurants association of India(NRAI) , expressing dissatisfaction that the decision was taken by the department without engaging in conversation with them .
"We had sought clarification from the Hotel association of India, which agreed to the notification that service charge should be completely discretional" said P.V Ramashastri, Joint Secretary, Consumer Affairs department.
The Consumer Protection Act, 1986 also provides that a trade practice that adopts any unfair method or deceptive practice, is to be treated as an "unfair trade practice".
"A customer can make complaint to the appropriate consumer forum established under the act. Following the increase in complaints , we rolled out such a notification, which increased awareness amongst the consumers" added P.V Ramashastri, Consumer affairs department.
A lot of restaurants have to say that it is a muddled decision from the government, to pay the service charge voluntarily. Either it should be completely abolished, and let people tip or it should remain.