Paswan dials PMO to stop service charge

The department of consumer affairs has sought the help of the Prime Minister’s Office (PMO) to assist states to enforce its decision that hotels and restaurants must not charge the service charge on food items. Doing so is illegal, as is any mention of it in the menu card, said Food and Consumer Affairs Minister Ram Vilas Paswan (pictured) to reporters in New Delhi on Friday.

The Department of Consumer affairs has sought the help of the Prime Minister’s Office (PMO) for states’ enforcement of its decision that hotels and restaurants must not charge a service charge on food items.

Doing so is illegal, as is any mention of it in the menu card, said Food and Consumer Affairs minister Ram Vilas Paswan (pictured) to reporters here on Friday.

Hotels and restaurant bodies say the minister’s move is illegitimate and would increase the cost of eating out.

“A service charge is an important part of our industry. We urge the government to look at how much this benefits the entire staff of a restaurant and reconsider this proposal,” said Rohit Malhotra, marketing head of Barcelos.

Ashok Bansal, general secretary, Hotel Association of Chandigarh, said that giving of tips is an old tradition but is an additional burden on consumers, already paying 22 per cent in taxes on eating out. “Service charge should be voluntary, not completely removed as an option,” he said.

Paswan added that after the Centre’s intervention, global giant Pepsico has started selling mineral water bottles at the same rates, irrespective of place of sale. And, the Board of Control of Cricket in India (BCCI) has assured that bottled water will be sold at the same Maximum Retail Price at all stadiums under its affiliation as outside. So, too, for packaged food items inside stadiums, Paswan told reporters.

On a third issue of controversy, his desire that eateries price food by portions served, to check wastage, the minister said he had extensive discussion with hotel and restaurant owners. And, it had been decided that both they and his ministry would start an awareness campaign to sensitise customers; compliance would remain voluntary.

“The big hotels and restaurants said they would first sensitise their waiters to make the customer aware of what a portion comprises. Second, customers would also be made aware. Finally, some hotels have assured they would on their own try to lower wastage,” the minister said. No law or questionnaire was being prepared to check portions.

A SERVICE CHARGE IS AN IMPORTANT PART OF OUR INDUSTRY. WE URGE THE GOVERNMENT TO LOOK AT HOW MUCH THIS BENEFITS THE ENTIRE STAFF OF A RESTAURANT AND RECONSIDER THIS PROPOSAL