New Delhi– Though customers now refuse to pay the service charges levied by restaurants, the owners of the eateries have voiced their disappointment over the centres decision on the issue, saying it would “adversely impact millions of workers”.
“Levying service charge is an established practice of several years and it has even been upheld in the court of law. Most of money collected goes to the staff and is an integral part of their income. Discontinuation of the same at this stage will adversely impact millions of workers and therefore we plan to continue levying the service charge as before,” Anurag Katriar, Executive Director and CEO at Mumbai’s deGustibus Hospitality Pvt. Ltd told IANS.
The Department of Consumer Affairs on Monday issued a statement saying that customers dissatisfied with service at any hotel or restaurant can opt for the service charge not being levied as this is optional or discretionary.
“The decision of the Department of Consumer Affairs to make levy of service charge optional or discretionary will affect around 8.5 million employees associated with the food service industry,” said Riyaaz Amlani, the President of NRAI (National Restaurant Association of India).
According to Mihir Desai, Co-owner of Mumbai’s Corum Hospitality, the customers should not deny paying after using the services and they should be well informed about the service charge before ordering.
“Service charge is not wrong, it should be mentioned on the menus. If customers don’t wish to pay they will not take your services. If customer doesn’t like your food for any reason so will they not pay for it,” Desai wondered.
The decision was taken in lieu of complaints received from consumers that many hotels and restaurants charged “service charge in the range of 5-20 per cent, in lieu of tips” and consumers were “forced to pay irrespective of the kind of service provided”, the department said.
“Earlier the tips used to go only to the service staff and there was a big gap between what the kitchen and service staff were making. Since service charge is distributed equally amongst all departments based on grades, it helps motivate everyone and improve team moral”,” Mitesh Rangras, Partner of Mumbai’s SID hospitality mentioned.
A clarification was sought from the Hotel Association of India which replied that the “service charge is completely discretionary and should a customer be dissatisfied with the dining experience they can have it waived off”, as per the department.
“The service charge should be on the complete discretion of the customer and his satisfaction. It should not be imposed on them. The restaurants should focus on giving premium services to all their guest and let the customers decide if they want to pay for the good service render”d,” Samira Chopra, Director of New Delhi’s Cybiz BrightStar Restaurants, stated.
The department has asked the state governments to advise hotels and restaurants to disseminate information, such as through displays, that “the service charges are discretionary or voluntary” and to sensitise the companies, hotels and restaurants regarding provisions of the Act.
“It is a matter of policy for a restaurant to decide if service charge is to be levied or not. Information regarding amount of service charge is to be clearly mentioned by restaurants on their menu cards or otherwise also displayed, so that customers are well aware of this charge before availing the services and can use their discretion of not using the facility offered by the restaurant,” Amlani added.