Ministry of Consumer Affairs, Food & Public Distribution on 23rd May 2022, has cautioned the restaurants and eateries against the forced collection of service charges from the consumers.
The Department of Consumer Affairs has earlier published guidelines dated 21.04.2017 on charging of service tax by hotels/restaurants. The guidelines note that entry of a customer in a restaurant cannot be itself be construed as a consent to pay service charge. Any restriction on entry on the consumer by way of forcing her/him to pay service charge as a condition percent to placing an order amount to ’restrictive trade practice’ under the Consumer Protection Act.
The guidelines clearly mention that placing of an order by a customer amount to his/her agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging for anything other than the aforementioned. without express consent of the customer. would amount to unfair trade practice as defined under the Act.
To discuss the issues pertaining to service charge levied by restaurants, the Department of Consumer Affairs (DoCA) has scheduled a meeting on 2nd June, 2022 with the National Restaurant Association of India.
