Taking a sharp dig at the Restaurant and Hotel Associations, the Delhi High Court questioned the additional charges eateries and restaurants charge on packed goods. The Court asked that when the price of a product is already fixed (MRP), then how can an additional amount be charged from the customers, and why this amount should not be considered as a service charge.
A division bench of Chief Justice D.K. Upadhyay and Justice Tushar Rao Gedela made this remark when the appeal of the National Restaurant Association of India and the Federation of Hotels and Restaurant Association of India was being heard.
The Delhi High Court has made a strong comment on the service charge being levied by restaurants and hotels on customers. The court said that according to the order given in March, restaurants cannot add service charge to the bill in a hidden or forced manner, as it is against public interest.
In the hearing held on Friday, the division bench of Chief Justice D.K. Upadhyay and Justice Tushar Rao Gedela said that restaurants are charging three types of charges from customers. The price of the food sold, the cost of AC facility, and service charge in the name of serving food. The bench raised the question that when the owners are already charging more than the MRP for the experience that the person visiting their restaurant gets, then why is a separate service charge being taken in the name of service.
In a legal debate over restaurant service charges, the Restaurant Association argued that the extra fees cover the dining experience and atmosphere.
However, the court countered that elements like ambiance, music, seating, and hospitality should already be included in the base service charge. The court questioned where the extra fee of 80 rupees, charged in addition to the Maximum Retail Price (MRP), would be categorized.
The Restaurant Association’s lawyer maintained that the charge is part of a “complete contract,” implying that customers can choose whether or not to dine there.
In contrast, the central government’s lawyer informed the court that many restaurants are still forcibly charging a service fee, despite a previous court order stating it should be voluntary.
Previously, on March 28, the court had referred to the service charge as a “double blow” to consumers, who are also required to pay GST. The court criticized the arbitrary and coercive collection of these fees, asserting that it would not be a “mute spectator” to such practices.
Join our whatsapp group for Latest updates
Click Here for Chhattisgarh News
Click Here for Entertainment News