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You will be free from paying service charges in restaurants soon

You will be free from paying service charges in restaurants soon

Many restaurants and hotels in India levy service charges and customers are mandated to pay involuntarily.

And there has been a surge of complaints from consumers that they are being forced to pay for this component, irrespective of the quality of service provided.

However, the Centre is soon going to put an end to it as per a PTI report.

The consumer affairs ministry on Thursday asked the hotels and restaurants associations to stop compulsory levying of "service charge" in their bills, calling it illegal. The ministry will come out with a legal framework to end this practice.

The decision was taken at a meeting between the consumer affairs ministry and the NRAI on discussions over complaints by consumers being forced to pay service charges.

During the meeting, representatives of NRAI and FHRAI said that levying service charges was not illegal.

After the meeting, Consumer Affairs Secretary Rohit Kumar Singh said that although the associations claim the practice is legal, the Department of Consumer Affairs is of the view that it adversely affects the rights of the consumers, and it is an "unfair trade practice".

He noted that consumers usually get confused between service charge and service tax and end up paying.

The ministry had taken notice of a number of media reports and the grievances registered by consumers on the National Consumer Helpline, news agency PTI had reported.

An official release said that during the meeting, major issues raised by the consumers on the National Consumer Helpline of the department were discussed. Those were related to compulsory levy of service charge, adding the charge by default without the express consent of the consumer, suppressing that such charge is optional and voluntary, and embarrassing consumers if they resist paying such charge.

Consumer organisations observed that levying a service charge is "patently arbitrary" and constitutes an unfair as well as restrictive trade practice under the Consumer Protection Act, according to the release.

Questioning the legitimacy of such a charge, it was highlighted that since there is no bar on restaurants/hotels on fixing their food prices, including an additional charge in the name of service charge is detrimental to the rights of consumers, the release said.

During the meeting, FHRAI clarified that a restaurant collecting service charge is neither illegal nor in violation of the law. The association explained that a service charge, like any other charge collected by an establishment, is part of the invitation offered by the restaurant to potential customers. It is for customers to decide whether they wish to patronize the restaurant or not, FHRAI said in a separate statement.

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