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There is no illegality in levying service charge: National Restaurant Association of India



In response to the news stating that the union consumer affair secretary Rohit Kumar Singh has written to National Restaurant Association of India (NRAI) issued a statement on Tuesday and mentioned that “this matter had come up in 2016-17, and NRAI had provided it’s response to the government. There is nothing new which has been communicated by the department in its letter for the meeting on June 2.”

As per reports, the letter to NRAI cites the guideline issued by the ministry in April 2017 and said forcing consumers to pay service charge as a condition precedent to placing an order amounts to a “restrictive trade practice” under the Consumer Protection Act. It was also flagged that consumers are being misled on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amount. In its statement, NRAI stated, “The levy of service charge by a restaurant is a matter of individual policy to decide if it is to be charged or not. There is no illegality in levying such a charge. Information regarding the amount of service charge is mentioned/displayed by restaurants on their menu cards and otherwise also displayed on the premises, so that customers are well aware of this charge before availing the services. Once the customer is made aware of such a charge in advance and then decides to place the order, it becomes an agreement between the parties, and is not an unfair trade practice. GST is also paid on the said charge to the government.”

In the meeting scheduled for next month, four issued will be reportedly discussed. They are, restaurants making service charge compulsory, adding service charge in the bill in the guise of some other fee or charge, suppressing from consumers that paying service charge is optional and voluntary, and embarrassing consumers in case they resist paying service charge.

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