Centre to soon come up with framework to check 'service charge' levied by restaurants

Highlights

Department of Consumer Affairs will soon come up with a robust framework
It's to ensure strict compliance by stakeholders with regard to service charge levied by restaurants
Dept held a meeting on June 2 with restaurant associations and consumer organizations on this matter

The Department of Consumer Affairs (DoCA) will soon come up with a robust framework to ensure strict compliance by the stakeholders with regard to service charge levied by restaurants and hotels as it adversely affects consumers on a daily basis.

The Department held a meeting on Thursday (June 2) with restaurant associations and consumer organizations on the levy of service charge in hotels and restaurants. The meeting was chaired by Rohit Kumar Singh, Secretary, DoCA.

An official release said the meeting was attended by major restaurant associations including National Restaurant Association of India (NRAI) and the Federation of Hotel & Restaurant Associations of India (FHRAI) and consumer organizations.

Topics of discussion:

During the meeting, major issues raised by the consumers on the National Consumer Helpline of DoCA relating to service charge were discussed. Further, guidelines on fair trade practices related to the charging of service were also referred to.

The restaurant associations observed that when service charge is mentioned on the menu, it involves an implied consent of the consumer to pay the charge. Service charge is used by restaurants/hotels to pay the staff and workers and is not charged for the experience or food served to consumer.

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Consumer Organizations observed that levying service charge is patently arbitrary and constitutes an unfair as well as restrictive trade practice under the Consumer Protection Act.

Questioning the legitimacy of such charge, it was highlighted that since there is no bar on restaurants/hotels on fixing their food prices, including an additional charge in the name of service charge is detrimental to the rights of consumers.

(With ANI inputs)