Charged Rs 116 service charge, Gurugram restaurant to now pay customer Rs 31,000

Rs 116 service charge

The complainant alleged that he visited the restaurant with his family for dinner and that, after the meal, he was surprised to find the restaurant had added a service charge of Rs 116.30, amounting to 10 per cent of the Rs 1,163 bill. It was stated that the complainant tried to convince the restaurant to remove the service charge allegedly added unilaterally, but to no avail.

Alleging deficiency in service and unfair trade practice, the complainant moved consumer commission seeking refund and compensation.

The commission examined the bill and found that the restaurant had indeed levied the service charge. It also referred to the CCPA guidelines issued on July 4, 2022, which prohibit hotels and restaurants from automatically adding a service charge to bills. The guidelines state that service charges cannot be collected by default or under any other name. They also require restaurants to inform customers that payment of such charges is voluntary and at their discretion.

CCPA in its guidelines also stated that a component of service is inherent in price of food and beverages offered by the restaurant or hotel. “Pricing of the product thus covers both the goods and services component. There is no restriction on hotels or restaurants to set the prices at which they want to offer food or beverages to consumers. Thus, placing an order involves consent to pay the prices of food items displayed in the menu along with applicable taxes. Charging anything other than the said amount would amount to unfair trade practice,” it had said.

Holding the restaurant guilty of deficiency in service and unfair trade practice, the commission directed the establishment to refund the service charge of Rs 116.30 and pay Rs 20,000 as compensation for mental harassment, pain and agony, and economic loss caused to the complainant, besides Rs 11,000 towards litigation expenses.

Takeaway

Restaurants cannot automatically add a service charge to a customer’s bill. Under the CCPA guidelines, payment of a service charge is voluntary and at the customer’s discretion, and its compulsory levy amounts to an unfair trade practice.

Consumers facing similar grievances may contact the consumer helpline in their respective states (Haryana helpline: 1800-180-2087) or dial the National Consumer Helpline at 1915 for assistance.

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