Delhi HC okays levying service charge till next hearing, issues notice to restaurants

The Delhi High Court has said restaurants can continue to levy service charges till the next hearing on the appeal filed by the Central Consumer Protection Authority over the court's decision to put a stay on the ban on service charges at restaurants.

"Can consumers be compelled to pay a service charge?" the High Court quipped urging restaurants to increase salaries if restaurants are worried about their staff. The High Court also likened the service charge levied to that of a governmental levied tax and ruled that it would further hear the case on August 18.

The Delhi HC has also issued a notice to restaurant bodies, including The Federation of Hotel and Restaurant Associations of India (FHRI) and the National Restaurant Association of India (NHRI), based on the appeal filed by the CCPA.

A few days ago, the CCPA, which comes under the Union Ministry of Consumer Affairs, Food and Public Distribution, approached the Delhi High Court challenging the court's decision to stay the recent guidelines issued by the government, restraining the levy of service charges on food bills by eateries.

The decision of the single-judge bench of the Delhi High Court to put a hold on the government's decision to levy a service charge on a consumer by restaurant and hotel owners was challenged in the CCPA petition.

The Single Bench of Delhi HC, after hearing the petition of the Hotel Restaurant Federation, had stayed the collection of service charges by the government.

Earlier, in June, the consumer affairs ministry had asked eatery associations to stop levying service charges in their bills compulsorily, calling it illegal. The ministry had also said it will come out with a legal framework to end this practice.