The Central Consumer Protection Authority (CCPA) earlier this week released a set of guidelines that stated, restaurants and hotels are no longer supposed to add service charge to the bill by default. CCPA and The National Restaurant Association of India(NRAI) had been at loggerheads with each other over the row of imposing a service charge on restaurant goers.
The guidelines that were issued by CCPA earlier this week, stated that service charge was optional and consumers are no longer bound to pay the sum. Not only that, consumers can now request the restaurant to remove the service charge or even file a complaint against unfair trade practice with the Consumer Commission.
What is Service charge?
Service charge is a part of an owner’s discretion as well as decision regarding the total price payable by a customer with regards to the sale or service of a product. It constitutes one of the components of the total price of the product.
However, NRAI, in a statement released on Wednesday, amplified that levying service charge at restaurants is not illegal. “Service Charge is protected by contract law and thus, one is contractually bound to pay the sum. Neither the government nor any authority can interfere with the decision of the business owner in this regard,” read a statement by the pan-India organisation.
These contradictory guidelines by the two organisations have caused confusion among foodies and restaurant owners. It seems just like NRAI and CCPA, even people are divided on the opinion whether one should pay a service charge or not.
“This is a two-edged sword. I believe in all-inclusive bills that include service charge. The essence of tipping comes from being overwhelmed by a job well done or giving something to thank someone for their time, which ideally, should be compensated by the restaurants,” said Poorna Banerjee, a food blogger from Kolkata.
On the other hand Shaoni Chowdhury a foodie based in Gurgaon, believes that tipping is always better than paying a service charge because there is zero accountability on behalf of the restaurant in case of whether or not the service charge would actually go to benefit the service providers . “If I am not okay with the service, why should I pay an additional charge? It’s always better to tip because the sum collected in the name of service charge is pocketed by the restaurant owners and hardly any of it goes to the staff, ” she said.
Another avid foodie who wishes to remain anonymous, wholeheartedly supported the CCPA’s diktat to remove service charge from the restaurants. “It is a great move. I strongly support the evasion of service charges. One cannot put a price on service.” she said.
Anurima Dave, who likes to frequent restaurants on weekends, said, “Many places in Europe and Asia do not have service charges or the expectations of tips because their staff are paid a sufficient wage. I don’t see why it’s different in our country.”
However, a restaurateur, who agreed to speak on the condition of being anonymous, holds a different view on this matter. He said, “When we collect service charge, we equally compensate everyone that includes servers, cleaners, attendants and workers. They strive really hard to keep the business up and running. That’s why we believe one should not hesitate to pay for the services provided to them.”
Similarly, Rutin Paul, who runs a chain of cafes in Lucknow thinks that those who weasel out of a situation where they are required to pay service charge, they are doing a grave injustice to the restaurant industry.
Paul said, “A measly sum in the form of service charge goes a really long way in helping servers and workers. Only when they are satisfied, they would be able to provide the kind of service that is at par with customer’s expectations.”
Suketu Manu, a food influencer on Instagram expressed his views on the same, he said, “Now, restaurants would club service charge into the menu rates and then everyone will have to pay more than what they bargained for. Service charge was a better alternative for everyone. It was a win-win for both restaurants and customers.”
NRAI has maintained their stance that if the guidelines issued by CCPA are enforced, they would challenge them in appropriate forums. With both sides refusing to reach a common ground and adamant to fight each other legally, it is quite evident that we have not yet heard the last of this issue.
