If you place an order, you’re accepting the service charge, restaurant body says

If you place an order, you’re accepting the service charge, restaurant body says
Restaurants think they don't need your permission to levy service chargesCanva
  • The service charges that you pay on your restaurant bills are legal, according to the National Restaurant Association of India.
  • The Department of Consumer Affairs, though, has a different opinion, stating that this is an ‘unfair trade practice’.
  • Do you care about service charges? If so, the department has your back.
The National Restaurants Association of India (NRAI) hit back at the Department of Consumer Affairs advisory which called out restaurants for levying service charges without the express consent of customers.

Yesterday, the consumer affairs department slammed restaurants for levying a service charge by default. In a 2017 advisory, the department had termed this as an ‘unfair trade practice’ and issued guidelines to seek ‘express consent’ of restaurant-goers.

Essentially, the department wants restaurants to seek permission regarding service charge before levying it and adding it to the dining bill.

Now, the NRAI has hit back, calling it ‘legal’. “Information regarding the amount of service charge is mentioned/displayed by restaurants on their menu cards and otherwise also displayed on the premises,” a press release by the association stated.

So, if a customer decides to go ahead and place an order, the association says it is automatic consent and thereby, an agreement.


However, the government thinks there is a grey area - and believes it has a ‘significant impact’ on consumer rights. It shot off a letter to the NRAI, stating that it is examining the matter in close detail since it “impacts consumers on a daily basis”.

The department has called a meeting with the NRAI to discuss the matter on June 2.

“The meeting will discuss restaurants making service charges compulsory; adding service charges to the bill in the guise of some other fee or charge; suppressing from consumers that paying service charges is optional and voluntary; and embarrassing consumers in case they resist from paying the service charge,” the letter said.

But do the consumers care?

Despite the department’s proactive participation in the matter, a recent survey has established that one in three consumers do not pay attention to whether service charges have been levied or not.

Of the consumers surveyed, only 30% said they do not pay service charges. A mere 7% said that while the restaurants did levy service charges, they got it removed.

It remains to be seen if the consumer affairs department’s active interest in this matter runs its course or fizzles out.


A third of restaurant goers don’t even notice the ‘unfair’ service charge on their bills

An Indian credit card user spends ₹14,500 a month on average – 20x more than debit card users

Jio, Airtel and Vodafone Idea are reportedly planning on increasing prices again