Indians are no longer bound to pay tips or service charges at restaurants. A new order issued by the Central Consumer Protection Authority (CCPA) has banned the default service charge in bills.
According to the order, hotels and restaurants cannot ask customers to pay tips as part of the food bill. "No hotels or restaurants shall add service charge automatically or by default in the bill".
There have been complaints about forced tipping in the restaurant industry for a long time. Earlier, the Consumer Affairs Ministry released a set of guidelines asking restaurants to skip the fee charged in the name of service. However, these guidelines lacked clarity and led to confusion.
The National Restaurant Association of India (NRAI) responded by saying the service charge was "legal" until there is a legal framework formed against them. The latest guidelines have given customers the right to lodge a complaint on the National Consumer Helpline (NCH) against default service charges in the bill.
Yesterday, the restaurant association NRAI observed that when a service charge is mentioned on the menu, it implies the consent of the customer to pay the charge. On the other hand, consumer organisations argue that levying service charges is patently arbitrary and unfair.
NRAI President Kabir Suri argued that the debates on the public domain are creating unnecessary confusion. It is disrupting the smooth operation of restaurants.
Questioning the legitimacy of tips, the government agency highlighted that restaurants are free to fix their food prices as they wish. Including an additional charge on the bill on top of that is "detrimental to the rights of consumers," reported Livemint.
Now, establishments are not allowed to collect tips under any other name either. The order further said no restriction or entry or provision of services should be imposed on customers on the basis of collecting tips.
However, tips will remain an optional choice. If the customer wants to leave a tip for employees, they are free to do so.