Are restaurants entitled to impose Service Charges on customers?

Last month, I visited a restaurant along with a few of my friends. I never had a habit of checking the bill break up before making the payment. Surprisingly, that day the given bill was a little overpriced than what I was anticipating. So, I had curiously gone through the whole bill and noticed a new slab that mentioned saying "Service Charge" as 10%. Having been well aware of SGST and CGST, I was shocked to see Service Charge in addition. The 10% of my bill was summing up to Rs. 800, which was overwhelming to me.

From where did this new slab of Service Charge come? Are the restaurants allowed to levy such charges in addition to GST?

Usually, when the Consumer is happy and satisfied with the services, they pay a tip to the waiter, which is an extra expense thanking for their services. Considering the costs of services and goods, the fixed price of an item already includes the service cost component. Therefore, the service charges cannot be collected separately again. So, now this so-called "Service Charge" is unjustified costs imposed on the Consumer.

I have noticed this practice of service charge mainly taking place in the premium and high-grade restaurants/hotels. The restaurant owners interpret "Service Charge" as a tip for the waiters. But in reality, the tip paid to the waiter must be at the Consumer's discretion, not at the restaurant's will. The restaurant or the hotel should not have any interference in it. So, mentioning an additional element in the bill with "Service Charge" and fixing it as 5% or 10% by the restaurant itself makes the consumers feel mandatory to pay. Even if you pay this service charge assuming as a tip to the waiter, you never know whose pockets it is actually going into and what differentiated percentages are.?The restaurants claim that this charge is optional, and the customer can ask to deduct the amount if not willing to pay.?

How can the restaurants include service charge in the bill in the first place, without the Consumer's consent? Is it fair for the restaurants to take a customer's gratitude for granted and impose this charge? While actually, it is supposed to be the other way around. When I am happy with the service, I shall give a tip at my discretion how much ever I want.

Also, it is morally not correct for restaurants to take advantage of innocent people. Not every citizen of this country is well aware of the taxes and charges they are responsible for paying. So many people end up paying these service charges assuming these are mandatory, instilling faith in the institutions and laws that keep all the stakeholders in the system accountable. But, I feel the restaurants finding such unethical ways to make profits is disrespecting their customers. These kinds of practices lack moral worth and integrity in their business.

It is a clear unethical practice and a violation of the restrictive trade practice mentioned under "THE CONSUMERS PROTECTION ACT."?

Let's look at a case where consumers fought back against the restaurants for unfair practices. In the case of?Jai Jeet Singh vs. Punjab Grill Restaurant, Mr. Jeet filed a complaint against the Punjab Grill in the District Consumer Dispute Redressal Commission, asking refund of Rs. 182 paid by him to the restaurant as service charges, costs, and compensation. He submitted that he had taken food at the Punjab Grill Restaurant. However, the food quality and services provided were not proper. However, when he had received the bill, it included 10% of the amount towards service charges amounting to Rs.181.50. As he submitted that services were not proper, he was not ready to pay Rs.181.50 towards service charges to the restaurant. However, the restaurant authority had behaved rudely with him and insisted on paying that amount. Therefore, he filed a case in the consumer dispute redressal commission.?

Later, the Consumer forum directed the opponent to pay an amount of Rs.182/- to the complainant as refund with interest on that amount along with compensation of Rs.5,000/- and amount of Rs.5,000/- towards costs of litigation.

In conclusion, it is not mandatory to pay these service charges; the consumer can deny paying it. If they force to pay, one can approach the consumer forum and file a complaint. Also, the government authority must put in the effort to build awareness in the citizens about such unfair practices and legislate strict policies against adding any extra charges (such as service charge) apart from GST in the invoice.

Through this blog, I want to create awareness among the readers about their right to deny the service charge and keep the restaurant authorities accountable.

Because I believe when we individually exercise our rights, it lays the foundation of a just society.