Several restaurants in Mumbai continue to levy so-called service charges despite the Central Consumer Protection Authority (CCPA) banning this levy. "In July 2022, the CCPA had directed restaurant management not to levy this charge even by default. Restaurant owners levy anything from 10 % to 20% of the total food and beverages bill as a service charge. In fact, some of them have even put up boards at the entrance informing that they will be levying service charges," Said South Mumbai resident Surinder Sharma.
"Whenever I see that a restaurant had imposed a service charge, I refuse to pay. Most of the time the management obliges and deletes the service charge from the bill," Vidya Anirudh, a regular patron of restaurants," said. "Levying service charges is like forcing customers to pay tips. Earlier customers paid tips as a way of appreciation for the food and service. But, now it has been made mandatory whether you liked the food/service or not," he added.
The CCPA guidelines empower consumers to complain against the practice under various provisions of the Consumer Protection Act calling it anT‘`unfair trade practice,'’ and a violation of consumer rights. “No restriction on entry or provision of services based on a collection of service charge shall be imposed on consumers,” the CCPA had warned.
President of the Association of Hotels And Restaurants (AHAR) Sukesh Shetty said the CCPA's statement is only an ``advisory". ``It is left to individual restaurant owners to follow it or not," he added.
A spokesperson for the Western India Federation of Hotels and Restaurants Associations (Western Region) Harshala Nayak said, "the CCPA's directive has been stayed by the Delhi high court."
"The stay was granted on July 20, 2022, and it still continues," she claimed. A hotelier, who declined to be identified, said, "the insistence on service charges is giving a bad name to the hospitality industry. Earlier, customers used to voluntarily give tips to waiters. By making service charge compulsory we are spoiling our relationship with our customers. I hope wiser counsels will prevail and hotel managements will withdraw service charge altogether."
