Key Points
The Delhi High Court on Wednesday asked the National Restaurant Association of India and Federation of Hotels and Restaurant Associations to consider changing the "service charge" terminology to some alternative term like "staff welfare charges" so that the consumers are not misled into believing it to be a government tax...
The Central Consumer Protection Authority (CCPA) issued guidelines on July 4 that no hotel or restaurant shall add service charge automatically or by default in the bill and that the service charge shall not be collected from consumers by any other name...
What the courts have said. A common person perceives service charge as a government levy and restaurants can increase their food prices to absorb this charge instead of recovering it in the form of an additional charge over and above the total bill, the Delhi High Court observed last year while hearing an appeal by the Centre against the order staying its guidelines prohibiting levying service charges automatically on food bills...
A person who does not understand law goes for a cup of tea, so he is entering into a contract and he has to pay the service charge," the court remarked last year in response to counsels appearing for restaurants arguing that the government does not prohibit service charges and when it is made clear by the restaurant that there would be a levy of service charge, it becomes a matter of contract...
Yesterday, the Delhi High Court directed the hotels and restaurants to also refrain from exhibiting on their menus that service charge levied has been approved by the High Court following an objection by the Central government...
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Restaurants still within their rights to levy service charge, say industry bodies
07, Aug, 23The Federation of Hotel & Restaurant Associations of India (FHRAI) and restaurant associations have stated that the Delhi High Court's recent order on service charge has been incorrectly understood , as restaurants are still within their rights to impose the charge while an interim stay on the Central Consumer Protection Authority's guidelines on the levying of a service charge remains.
Don’t force service charge on customers’: Following brawl at Noida mall, consumer affairs department writes to restaurant bodies
20, Jun, 23In April this year, the court said that the earlier order should not be shown on menu cards as it can “mislead consumers that service charge has been approved by the Court”.