Government asks Restaurants to Stop Levying Service Charges, Calls it Illegal
Consumers face a lot problems due to service charges levied by the restaurants. However, it's illegal now.
On Thursday, the Ministry of Consumer Affairs called the service charges levied by the restaurants as illegal. The Ministry has asked the National Restaurant Association of India (NRAI) to stop the practice of levying extra charges with immediate effect. As per the ministry, these service charges are impacting the consumers adversely.
As per the sources, the ministry said that there is no legal document regarding the levying of service charges by the restaurants to the consumers and the government will take legal action against it accordingly.
Read More: World Bicycle Day 2022: Benefits of Including Cycling in Your Routine
Meeting chaired by the Ministry of Consumer Affairs
On June 2, the Ministry of Consumer Affairs chaired a meeting with the National Restaurants Association of India (NRAI) to discuss the issues pertaining to extra charges levied on consumers by the restaurants as service charges. The service charge is levied as 10% of the total bill amount.
In a recent statement, the Ministry of Consumer Affairs said, "The meeting follows as a result of DoCA taking notice of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH).
Recently, a letter has been sent to NRAI by the Ministry of Consumer Affairs stating, "Since this issue impacts consumers at large on a daily basis and has significant ramifications on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail."
Read More: Covid Updates: India Logs 4,041 Fresh Cases
Service charge comes under "unfair trade practices", says Ministry
In a recent statement, the Ministry said, "As per the 2017 guidelines, any charges other than prices displayed on the menu card along with the applicable taxes, without the express consent of the consumer, comes under unfair trade practices."
Service charge is a "matter of individual policy", says NRAI
However, the officials of the NRAI said that the levying of service charges by the restaurants is a "matter of individual policy" and "there is no illegality in levying such a charge". It said, "the levying of service charge is beneficial for workmen as a class, who are employed in the establishments, and any move to the contrary would be detrimental to the interests of workers and against the labor-friendly stance of the government."
