The National Restaurant Association of India (NRAI) said on Tuesday that charging a service fee is not illegal and is a matter of individual policy. The statement comes in response to the government’s move to convene a meeting with the industry body on June 2, as it believes that this tax will be mandatory charged by consumers.
“Information on the size of the service charge is mentioned / displayed by restaurants on their menu card and otherwise also displayed on site, so customers are well aware of this fee before using the services,” NRAI said in a statement.
It said that once the customer has been made aware of such a charge in advance and then decides to place the order, it becomes an agreement between the parties and is not an unfair trading practice. Goods and service tax is also paid on the service tax.
The industry body said it had given its response to the government when this case had come up in 2016-17. “There is nothing new that has been communicated by the Department of Consumer Affairs in its letter to the June 2, 2022 meeting,” it said.
In a written statement to the NRAI recently, the Minister of Consumer Affairs, Rohit Kumar Singh, said that restaurants and restaurants by default charge service fees from consumers, although the collection of such fees is voluntary and at the discretion of consumers and not mandatory as per. law. Consumers are forced to pay service fees, often set at arbitrarily high prices by restaurants, he said.
“As this issue affects consumers as a whole on a daily basis and has significant implications for consumer rights, the department considered it necessary to examine it in more detail,” the statement said.
During the meeting, questions such as restaurants making service charges mandatory, adding service charges to the bill under the guise of another charge or fee, not informing consumers that payment of service charges is optional and voluntary, and bothering them if they object to paying service charges . , would be discussed.
According to the official guidelines published in April 2017, a customer’s access to a restaurant cannot in itself be interpreted as consent to pay a service fee. The guidelines further state that a customer who places an order corresponds to his or her consent to pay the prices indicated on the menu card together with the applicable fees, and to charge anything extra without the customer’s express consent would be unfair trading practice. .