The Central Consumer Protection Authority (CCPA) earlier this week issued a set of guidelines stating that restaurants and hotels will no longer add service charges to the bill by default. The CCPA and The National Restaurant Association of India (NRAI) were at loggerheads with each other over the imposition of service charge on restaurant goers.
Guidelines issued by the CCPA earlier this week stated that the service charge was optional and consumers are no longer bound to pay the amount. Not only this, consumers can now request the restaurant to remove the service charge or even file a complaint against unfair trade practice with the consumer commission.
What is service charge?
The service charge is part of the owner’s discretion as well as the decision regarding the total price payable by the customer in connection with the sale of the product or service. It is one of the components of the total price of the product.
However, NRAI in a statement issued on Wednesday said that levying service charge in restaurants is not illegal. “Service charges are protected by contract law and thus, a person is contractually bound to pay the amount. Neither the government nor any authority can interfere with the decision of the business owner in this regard,” PAN Read a statement by the India organization.
These conflicting guidelines from both the organizations have created confusion among foodies and restaurant owners. It seems like NRAI and CCPA even people are divided on the opinion whether one should pay service charge or not.
“It’s a double-edged sword. I believe in all-inclusive bills that include service charges. The essence of tipping comes from being overwhelmed by a job well done or giving someone something to thank for their time.” , which should, ideally, be compensated by the restaurant,” said Poorna Banerjee, a food blogger from Kolkata.
On the other hand, Shaoni Choudhary, who lives in Gurgaon, believes that tipping is always better than paying a service charge as there is zero accountability on the part of the restaurant, if the service charge will actually benefit the service providers or not. , “If I am not okay with the service, why should I charge extra? It is always better to give a tip as the amount collected in the name of service charge is pocketed by the restaurant owners and hardly any staff goes out of it. is,” she said.
Another avid fan who wishes to remain anonymous, wholeheartedly supports CCPA’s decree to remove service charge from restaurants. “This is a great move. I strongly support the evasion of service fees. One cannot price the service.” he said.
Anurima Dave, who frequents the restaurant on weekends, said, “Many places in Europe and Asia don’t expect service fees or tips because their employees are paid adequate salaries. I don’t understand why it’s ours. Why is it different in the country.”
However, a restaurant owner, who agreed to speak on condition of anonymity, has a different opinion on the matter. He said, “When we collect service charges, we compensate everyone equally which includes servers, cleaners, attendants and staff. They work really hard to get the business up and running. That’s why we believe that they should not hesitate to pay for the services they provide.”
Similarly, Rutin Paul, who runs a chain of cafes in Lucknow, feels that those who come out of a situation where they have to pay service charges are doing a gross injustice to the restaurant industry.
Paul said, “A modest amount in the form of service charges really goes a long way in helping the servers and employees. Only when they are satisfied will they be able to deliver the service as per the expectations of the customers.
Suketu Manu, a Food Influencer on Instagram, expressed his views on the same, he said, “Now, restaurants will add the service charges to the menu rates and then everyone will have to pay more than what they did. Service charge was a better option for everyone. It was a win-win for both the restaurant and the customers.”
NRAI has maintained its stand that if the guidelines issued by CCPA are implemented, they will challenge them at appropriate forums. With both sides refusing to reach a common ground and legally adamant to fight each other, it is quite clear that we have yet to hear the final word of the issue.
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