Mr. Goyal stated that restaurant owners are permitted to raise rates on their food menu in order to pay better salaries to their personnel.
Restaurants cannot add a’service charge’ to food bills, according to Food and Consumer Affairs Minister Piyush Goyal, who added that clients can provide “tips” separately at their discretion.
Mr. Goyal stated that restaurant owners are free to raise prices on their food menu if they wish to give greater compensation to their employees because there are no price regulations in the country.
He also dismissed restaurant owners’ claims that eliminating the service charge would cause them to lose money.
The consumer affairs ministry announced on June 2 that the government will soon issue a legal framework to prohibit restaurants from charging service charges on consumers, calling the practise “unfair.”
“You (restaurants) are not allowed to include a service charge on a bill. Customers cannot be forced to accept additional benefits if you believe they should be provided to employees. Mr. Goyal responded to a question about restaurant service charges by saying, “You may boost rates to give hikes.”
The minister stated that the government was receiving consumer complaints about the service charge imposed by restaurants.
“You are free to give employees raises and hike rates.” But how will consumers know the real price if there is a hidden cost?” he asked.
Mr. Goyal also mentioned that individuals leave tips if they are satisfied with the services they receive, and that they can continue to do so.
The Department of Consumer Affairs convened a meeting with representatives from restaurant associations and consumers on June 2.
Following the meeting, Consumer Affairs Secretary Rohit Kumar Singh stated that the government believes that imposing service charges has a negative impact on consumers’ rights and is also a “unfair trading practise.”
“We’ll start working on a legal framework as soon as possible because there were guidelines from 2017 that they didn’t follow.” “In general, the rules are not legally enforceable,” he had stated.
Representatives from the National Restaurant Association of India (NRAI), the Federation of Hotel and Restaurant Associations of India (FHRAI), and consumer groups such as Mumbai Grahak Panchayat and Pushpa Girimaji attended the conference.
The secretary also stated that a framework will be established soon in this regard, which will be legally compulsory on restaurants.
According to an official release, important issues made by consumers on the department’s National Consumer Helpline were considered during the discussion.
These were connected to the imposition of a mandatory service charge, the automatic addition of the charge without the consumer’s express approval, the concealment of the fact that the charge is optional and voluntary, and the humiliation of consumers who refuse to pay the price.
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