Restaurants still within their rights to levy service charge, say industry bodies

economictimes.indiatimes.com:

Central Consumer Protection Authority (CCPA) on service charge continues. The recent Delhi High Court order has been 'incorrectly understood', restaurant associations and restaurateurs told ET.

«There has been no violation as regards the service charge directions,» said Pradeep Shetty, vice president of Federation of Hotel & Restaurant Associations of India (FHRAI). The Delhi High Court imposed a fine of ₹1 lakh on the National Restaurant Association of India (NRAI) and FHRAI in end July to pay as costs for non-compliance of previous directions as per its order dated April 12.

As per the order dated April 12, the court had directed that both NRAI and FHRAI shall file a complete list of all their members who are supporting the present writ petitions by April 30, and both the associations shall file specific affidavit on aspects such as percentage of members who impose a service charge as a mandatory condition in their bills; whether the associations shall have objections with the term service charge being replaced with alternative terminology so as to prevent confusion in the minds of consumer that the same is not a government levy such as 'staff welfare fund' or 'staff charges' etc. «The cost and fine has been imposed by the court since there was a delay in filing of the affidavit.

The delay was due to various factors including non-availability of order, research on applicability of court fees, vacations etc. All this has been placed before the honourable court and condonation for the delay has been prayed for.