New Delhi (Sputnik): India's restaurant owners and consumers have locked horns over a clarification issued by the consumer affairs department. For now on, it is up to the consumer to pay the service charge levied by restaurants. In other words, consumers have the option of refusing to pay the service tax if their satisfaction level was not commensurate with the services offered.
#ServiceCharge should be abolished
— Rishi Bagree (@rishibagree) January 2, 2017
Most of the People think this to be a part of State Tax
Thus adds to negative Publicity for the Govt
"A number of consumers have complained that hotels and restaurants are levying "service charge" in the range of 5 to 20 per cent in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him," the consumer affairs department said in a statement on Monday.
The clarification led to a flurry of reactions on social media channels such as Twitter, Facebook, Whatsapp and others, with consumers demanding the government to abolish it.
Heard most waiters say that #servicecharge is pocketed by management and not passed on to them. Good that govt says it is up to you to pay
— Abhijit Majumder (@abhijitmajumder) January 2, 2017
Their demands haven't gone down well with the National Restaurant Association of India (NRAI), an industry lobby group, which has threatened legal recourse and cited judicial precedents to support its case for a mandatory service charge. It also issued a statement implying that customers were free not to eat at a restaurant if they did not wish to pay the service charge levied by it.
"We'll move the courts against this decision," said NRAI President Riyaaz Amlani and chief executive of a popular chain of restaurants, bars and cafe.
Apart from service charge, restaurants charge 12.5 per cent value added tax and 6 per cent service tax on the total bill, which theoretically goes to the government coffers.
What a farce #servicecharge so called govt order gives no relief to customers.wd hv meant something if it was termed illegal. #Jumlanomics
— smriti sharma (@Sharma21Smriti) January 3, 2017
Hotels and restaurants will now have to put up a display system stating that "service charges" are discretionary or voluntary and a consumer dissatisfied with the services can have them waived. The consumer affairs department said the Consumer Protection Act, 1986, provides that a trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice is to be treated as an "unfair trade practice."
Restaurants like Dominos is charging #servicecharge b4 giving services. How that charge can waived off on basis of like dislike of services.
— Prem Baranwal (@prembaranwal) January 2, 2017
"A consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices," it added.
