NEW DELHI: Restaurants cannot add “service charge” to food bills and it should be left to the discretion of the eaters, Union Minister of Food and Consumer Affairs Piyush Goyal Said on Friday.
The minister said adding a service charge to the bill is a “cheat”, and that eateries cannot mislead people by charging for the service. “It should be the consumer’s choice. You cannot add service charge to the (restaurant) bill… If you feel that some other benefits are to be given to the employees, then it cannot be imposed on the customers. You have to give the hike. Can raise prices…There is no price control on restaurants. We haven’t stopped restaurants from raising prices. This Wrong It is for the restaurants to say that they will suffer if the service charges are withdrawn,” Goyal said while replying to a query on the service charges by the restaurants.
The minister said that often, the service charge is not mentioned clearly and it varies across restaurants.
On Thursday, his ministry asked eateries to stop the practice of including service charges in bills, arguing that people often interpret “service charges” as “service tax”. It had also rejected the industry’s argument that as soon as customers enter a restaurant, they enter into a contract to pay the fee. The Ministry had quoted that the present consumer Protection The Act specifies unfair contracts which adversely affect consumers.
Goyal said that there are some countries where service charge is mandatory and hence people are aware of the rules. But there is no such rule or law levying service charge in India.
The minister said adding a service charge to the bill is a “cheat”, and that eateries cannot mislead people by charging for the service. “It should be the consumer’s choice. You cannot add service charge to the (restaurant) bill… If you feel that some other benefits are to be given to the employees, then it cannot be imposed on the customers. You have to give the hike. Can raise prices…There is no price control on restaurants. We haven’t stopped restaurants from raising prices. This Wrong It is for the restaurants to say that they will suffer if the service charges are withdrawn,” Goyal said while replying to a query on the service charges by the restaurants.
The minister said that often, the service charge is not mentioned clearly and it varies across restaurants.
On Thursday, his ministry asked eateries to stop the practice of including service charges in bills, arguing that people often interpret “service charges” as “service tax”. It had also rejected the industry’s argument that as soon as customers enter a restaurant, they enter into a contract to pay the fee. The Ministry had quoted that the present consumer Protection The Act specifies unfair contracts which adversely affect consumers.
Goyal said that there are some countries where service charge is mandatory and hence people are aware of the rules. But there is no such rule or law levying service charge in India.