With appeal pending in HC, can restaurants add service charges to food bill? All you need to know
India Today
With the Centre's appeal pending in Delhi High Court, can restaurants add service charges to food bill? Here's all you need to know.
Hotels and restaurants can levy service charges from customers on food bills till August 31, when the Delhi High Court will hear the Centre's appeal against a court order that stayed its guidelines on service charges.
The court in its previous hearing had asked why restaurants recover service charges from consumers as an additional and separate levy. Ahead of the next hearing, we take a look at the issue involving service charges and what various stakeholders have said about the same.
Hotels and restaurants automatically levy service charges on customers in the range of 5-10 per cent over and above the food bills. The consumer affairs department later received complaints from consumers about the compulsory charge.
The government then held a meeting with hotels and restaurants on June 2 and asked the National Restaurant Association of India (NRAI) to immediately stop the "illegal" practice.
Within two days, the regulatory authority Central Consumer Protection Authority (CCPA) issued guidelines to prevent hotels and restaurants from levying service charges. The new guidelines stated that eateries should not add service charge automatically or by default on food bills.
READ | Delhi High Court okays levying service charge till next hearing, issues notice to restaurants
The National Restaurant Association of India (NRAI) and the Federation of Hotels and Restaurant Associations of India challenged this move in Delhi High Court and on July 20, a single judge bench stayed the government guidelines.
