Alok Gupta has been a real estate consultant in Mumbai for more than 20 years. He is the President of Central Zone One of the esteemed Estate Agents Association of India. Having having visited more than 60 nations, he attempts to view situations from the perspective of the average person. His email address is alok@himland.in. Opinions stated are those of the author.
Recently, I’ve noticed that practically all Indian restaurants include a service fee on their invoices, which can range from 5% to an astounding 20%. I used to pay the payment as it was, but after doing some research, I can see that this fee is essentially a “social extortion. To find out why, continue reading.
First of all, it should be noted that this is a voluntary contribution that is requested of the diners; often, we use it as “tips” for the servers who have provided us with good service. Furthermore, tips are, as we all know, given at the payer’s discretion and pleasure, not as a proportion of any given bill. The Ministry of Commerce has provided enough clarification on several occasions, stating that service charges are optional, discretionary, and solely payable at the consumers’ choice.
In accordance with section 18(2)(1) of the Consumer Protection Act of 2019, the Central Consumer Protection Authority, or CCPA, has published the following instructions explicitly…
(i) Neither a hotel nor a restaurant may include a service fee in the bill by default or automatically. (ii) No other name may be used to collect service charges from customers. (iii) No hotel or restaurant may require a guest to pay for their meal.
fee and must expressly state to the customer that the service charge is optional, discretionary, and at their choice. (iv) Customers must not be subject to any limitations on access or service supply due to service fee collection. (v) The service fee cannot be added to the meal bill and the GST cannot be applied to the entire amount.
Since an establishment is free to determine its own prices and the cost of services is included in the price of the food and drinks it serves, charging for services in addition to the bill is immoral and constitutes unfair commercial practices.
When we eat chapati at home, it costs no more than one or two rupees, but when we buy it out, it costs at least Rs. 20—sometimes even up to Rs. 40—but at least Rs. 10—in any case. So why is there this avarice in charging for services repeatedly? over the prices on the menu? Ironically, an outlet would charge more for service for a chapati supplied for Rs. 40/-than for one sold for Rs. 10/-!
It is acknowledged that a tip or gratuity is solely given at the discretion of the customer in appreciation for hospitality above and above the required minimum service. Therefore, a customer may only evaluate the quality and service after the meal is over and make a payment decision. What is the amount of any tip or gratuity? A customer does not automatically decide to leave a tip or gratuity just by walking into a restaurant or purchasing an order. Consequently, a service fee cannot be applied to the bill without the diner’s express permission. In order to avoid charging automatically and putting customers in a difficult situation when they inquire about the same, an establishment should first question its visitors and customers before imposing this fee. taken out of the bill. While some restaurants do charge a service charge, they do not specify how much it is on their menu. Thus, the proportion of service fee that each restaurant collects ought to be inquired about; in fact, it ought to be mentioned everywhere, along with the outlet’s name and emblem. Their advertising ought to make reference to the same thing.
All of these establishments take advantage of the fact that you could be reluctant to request the elimination of certain fees if you are visiting with business associates. Not only would the diners not request the removal of the service charge, but they might also choose to leave a gratuity. over the service price, and as Indian law enforcement moves slowly, visitors usually don’t report such incidents.
The diners also have a right to know how much was collected the day before, how much was dispersed and in what way, and how much was left undistributed, as the money collected through the service fee is used to pay the personnel. The publications that are eager of charging a service fee should also include information on the wages that they give to their employees. The money should either be returned to the diners or paid into the government exchequer, as is the case with undistributed dividends from corporations, if it stays undistributed for any reason for more than one week.
Now is the era of home delivery services and internet apps. The USP of almost all the applications is that they all provide free home delivery. Logically speaking, these delivery boys—who visit your house in the sun, rain, and all kinds of weather—are more deserving than those who provide services. You are in a climate controlled space. These applications will begin to collect these costs in one manner or another tomorrow if this service charge issue is not resolved.
Last but not least, if the dinner requests it, the outlet will most likely delete the service; nevertheless, if an outlet declines to do so, a complaint may be made against it. In certain instances, these retailers have been requested to reimburse not just the service fee that was gathered, along with a penalty for it. The district consumer commissioner mandated that Cream Center pay a penalty of Rs. 25,000/-on a service fee of Rs. 29/-that the restaurant had collected in the instance of Mr. Yogesh Patki.