Dining out at restaurants is a popular social activity enjoyed by people all over the world. While patrons focus on savouring delicious cuisine and experiencing exceptional service, one aspect of the dining experience often prompts discussions and questions: the service charge. The debate on service charges has been intense for a long time. Even recently, a brawl was reported on Monday at a restaurant at Spectrum Mall in Noida over a service charge.
Understanding These Charges
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Service charges are additional fees added to the final bill of a restaurant meal, usually expressed as a percentage of the total cost. They are distinct from tips or gratuities, which are voluntary payments provided directly to the service staff by customers. The service charge, on the other hand, is a compulsory charge determined by the restaurant, aiming to compensate the service staff for their efforts and to cover operational costs.
Numerous instances of eateries pressuring patrons to pay an additional fee on top of GST have occurred. A recent wild brawl broke out after a patron of a Noida restaurant refused to pay an additional service charge.
Although many customers are unaware that paying this is only required if they choose to do so. In accordance with consumer rights, if a restaurant pressures the client to pay service tax, the customer may file a complaint.
However, this was not the first time that such an incident happened because of a service charge.
So, Should You Pay Service Charge Or Not?
Many consumers have wondered why they should pay additional service fees when they were already paying 18% of the GST. Customers used to believe that the government included extra taxes and VAT in the service rates. The Delhi High Court on April 12, 2023, also stated the same thing. Justice Pratibha Singh also stated in her judgment that no restaurant can pressurise their customer on 2022 orders.
After that, the Central Consumer Protection Authority (CCPA) said that the government does not impose these fees and declared that they will be completely outlawed as of July 4, 2022.
The CCPA published a guideline outlining the restaurant’s rules. Any hotel or restaurant cannot impose an additional fee on its patrons, and only if those patrons are pleased with the service are they allowed to leave a tip and decide how much to leave.
What do you think of this additional charge?
Cover image credits: Canva