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Delhi HC Questions 'Compulsion' to Pay Restaurant Service Charge, to Hear Case on August 18

By: News Desk

News18.com

Last Updated: August 16, 2022, 12:03 IST

New Delhi, India

A number of consumers have registered their complaint on the National Consumer Helpline with regard to levying of service charge. (Image: Shutterstock)

A number of consumers have registered their complaint on the National Consumer Helpline with regard to levying of service charge. (Image: Shutterstock)

The HC observations come after the CCPA had moved the divisional bench of the Delhi HC against the levy of Service Charge. On July 20, the High Court had stayed the CCPA guidelines barring restaurants from levying service charge.

The row over restaurants charging customers a service charge reached the High Court once again with the Delhi HC questioning the move while hearing a plea by Central Consumer Protection Authority or CCPA earlier today.

“Can consumers be compelled to pay service charge?” the High Court quipped urging restaurants to increase salaries if restaurants are worried about their staff. The High Court also likened the service charge levied to that of a governmental levied tax and ruled that it would further hear the case on August 18.

The HC observations come after the CCPA had moved the divisional bench of the Delhi HC against the levy of Service Charge. On July 20, the High Court had stayed the CCPA guidelines barring restaurants from levying service charge.

The HC questioned the CCPA over consumers being compelled to pay the service charge and asked why restaurants that are concerned about their employees can’t raise prices and raise salaries instead of levying service charges adding that “the common man may perceive service charge as a government levy.”

On July 20, the High Court had ordered a stay on the new guidelines restraining restaurants from adding a service charge by default to food bills. The stay of the fresh guidelines of the country’s consumer watchdog on July 20 came after the challenging plea of the National Restaurant Association of India (NRAI).

Granting the stay, the court had also directed that the information regarding the levy of Service Charge must be displayed on menu cards so that customers are aware of this charge. In its response to the verdict, the NRAI had said it has always been steadfast in its assertion that there is nothing illegal in levying of Service Charge and it is a very transparent system.

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first published:August 16, 2022, 11:59 IST
last updated:August 16, 2022, 12:03 IST