Restaurants’ body NRAI insists on service charge

A day after the government clarified that restaurants cannot mandatorily add service charge on a food bill as customer can choose to have it waived if not satisfied with the experience, the National Restaurant Association of India (NRAI) said it begged to differ.

The Consumer Affairs Department's decision, taken after consulting the restaurants' and hotels' body, was also approved by the restaurant owners.

The Department of Consumer Affairs had also instructed restaurant owners to inform the customers in adequate manner that the service charge is not compulsory to be paid.

Accordingly, the government has asked the association to inform all eateries to put out display boards informing that service charges are entirely discretionary and customers may not pay it if they did not like the service

Now, a report in The Times of India says that the NRAI has issued a statement stating that ''customers were free not to eat at a restaurant if they did not wish to pay the service charge levied by it.''

NRAI represents independent restaurants and chains.

While prohibiting mandatory collection of service charge, the centre has cited provisions under the Consumer Protection Act, 1986, which provides that a trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice, the ministry had pointed out.

A consumer can make a complaint to the appropriate consumer forum against such unfair trade practices.

The consumer affairs ministry's move came in the wake of a number of complaints received from consumers that hotels and restaurants are following the practice of charging 'service charge' in the range of 5-20 per cent, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him.

In its reply to the central government on the practice of imposing service charges on Customers, the Hotel Association of India, has clarified that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience he/she can have it waived off. Therefore, it is deemed to be accepted voluntarily.