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On March 28, the Delhi High Court upheld the decision not to impose a service charge.
The case with compulsory service charge will be heard in the restaurant on the Delhi High Court today (9 May). The National Restaurants Association of India (NRAI) and Hotel Association will be appealed. Both associations appealed to the court demanding the right to include the service charge in the bill.
Earlier, the Delhi High Court on March 28 retained the guidelines ie the guidelines ie the guidelines released in 2022 by the Central Consumer Protection Authority (CCPA). This guideline states that hotels and restaurant can not add automatic or default service charge to food bills.
Justice Pratibha M Singh also imposed a fine of Rs 1 lakh on the restaurant association challenging the guideline.
Guidelines were stayed by the High Court on 20 July 2022
The order was passed on the petitions of the National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Association of India (FHRAI).
These guidelines were stayed by the High Court on 20 July 2022. The CCPA issued guidelines with the aim of preventing violations of the unfair trade practice and consumer rights.
There is no law that stops restaurants from imposing service charge: NRAI
NRAI’s petition states that there is no law that prevents restaurants from imposing service charge. And no such amendment has been made in the current law which should be illegally imposing service charge. The petitioner-association argued that the guidelines are arbitrary, unstable and should be canceled.
NRAI was represented by Advocate Lalit Bhasin, Neena Gupta, Ananya Marwah, Devvrat Tiwari and Ajay Pratap Singh of Bhasin & Company. FHRAI was represented by Advocate Sameer Parekh, Sumit Goyal, Sonal Gupta, Swati Bhardwaj and Abhishek Thakral.
The Union of India was represented by Advocate Abhinav Bansal, Vikramaditya Singh Tribhuvan, Shubham Sharma, Amit Gupta Ishan Malhotra, Chandan, Deepak Tanwar and Shivam Tiwari along with the Central Government Standing Council Sandeep Mahapatra and Ashish Dixit.
What is a service charge?
When you buy a product or service, you have to pay some money for it. This is called service charge. That is, service charge is taken from the customer for serving food and other services in hotels or restaurants.
Customers also pay the hotel or restaurant with service charge without questioning. However, this charge is taken at the time of transaction, not while taking service.
A few percent of the bill is charged service charge
The service charge is written at the bottom of your hotel or restaurant bill. This can usually be a few percent of your bill. Mostly it remains 5%. That is, if your bill is Rs 1,000, then this 5% service charge will be Rs 1,050.
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