Hindustan Times ST (Mumbai)

You can object if eateries still ask for service charge

- Mahua Venkatesh

Many restaurant­s across the country continue to levy service charge from their customers despite the government’s January 2 directive asking them to make it a voluntary option.

In order to ensure its strict implementa­tion, the state government­s were required to issue a notificati­on, which many have failed to comply with. Sources said that the Centre merely passed a guideline that has no legal validity.

Consumer activists are set to push for the early passage of the which envisages a consumer protection authority that will help speed up consumers grievance redressal process much like the practice followed in the US and many European countries.

“We are hoping that the bill is taken up in the current session of Parliament so that the issue can be resolved at the earliest,” Bejon Misra, consumer policy expert and founder, Consumer Online Foundation told HT.

The new bill once approved will repeal the 30-year-old archaic Consumer Protection Act. The regulatory authority will also have the power to recall products, cancel licences of entities if required and initiate

“There has been no statutory framework to ensure that service charge is made optional for customers. Besides, transparen­cy needs to be brought in and service charge must be distribute­d fairly,” Pushpa Girimaji, consumer policy expert said.

Earlier, the consumer affairs ministry in its guideline mentioned that people have the right to decide whether or not to pay the charge depending on their satisfacti­on.

The guidelines also mentioned that they could decide on the quantum.

Restaurant­s and hotels had been directed to put up notices at “appropriat­e” places on their premises announcing that “service charge is discretion­ary”.

Many restaurant­s, on the contrary, have put up boards, which clearly state that service charge

There is no directive from tax authoritie­s on the service charge, which could vary anywhere between 5% and 20% of the billed amount.

“With the current framework, one cannot do much as the onus is on the state government­s and restaurant owners are taking advantage of the legal loopholes,” Misra added.

Sources also said many restaurant­s, which have decided not to levy the charge upfront, have revised their rates for the dishes displayed on their menu. While the establishm­ents are supposed to pass on the service charge amount to waiters and other staff it often does not

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