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A district consumer commission in Mumbai has fined a restaurant ₹25,000 and directed it to refund a ₹29 service charge after ruling that levying a ‘mandatory’ service charge is not only ‘highly objectionable’ but also illegal.
The ruling came after lawyer Yogesh S Patki filed a complaint against Girgaon-based Cream Centre owner Prince Cuisines Pvt Ltd in 2017. The South Mumbai District Consumer Disputes Redressal Commission recently ruled in favor of the lawyer, describing the service charge as “highly objectionable” and “illegal.”
The commission emphasized that the experience of dining includes a bouquet of additional services provided by the restaurant and that collecting a mandatory 5% service charge is unjustifiable and unlawful. It further noted that customers may perceive the service charge as a statutory levy due to its mention alongside service tax on the menu card.
According to the commission, the restaurant’s practice of levying a mandatory service charge implies a certain standard and quality of services, including the ambience, air conditioning, crockery, carpets, furniture, and staff services. However, the commission clarified that tipping is a matter between customers and service staff, and the restaurant has no authority over it.
In response to the complaint, the restaurant claimed to be a leading service provider in the hospitality industry and defended its practice of imposing charges only on dine-in customers. The commission directed the restaurant to cease imposing mandatory service charges in the future.
Sources By Agencies
