CHENNAI: Despite directives from the ministry of consumer affairs, many restaurants in Chennai, especially higher-end establishments, still add a
service charge
of 5% to 10% to their patrons’ bills in addition to what is supposed to be an all-encompassing Goods and Service Tax (GST).
Tony cafés and upmarket restaurants have been levying the extra charge since July 1, without explicitly stating that this payment is voluntary as mandated by the ministry, making bills swell further because it is an addition to GST of 12% (at non-AC restaurants), 18% (at AC restaurants) and 28% (in 5-star hotels).
“The bill presented to the customer may clearly display that service charge is voluntary, and the service charge column of the bill may be left blank for the customer to fill up before making payment,” the ministry stated, adding that levying service charge without the consent of the consumer is an unfair trade practice.
The ministry told the
Lok Sabha
on Tuesday that its helpline number had received many complaints on the issue.
People who eat out in Chennai may want to call the helpline too because few restaurants in the city follow the rules.
A couple went to dine in
Kaidi Kitchen
in Mylapore last week and received a bill with a 10% service charge along with 18% GST. A day later, after learning that they’d been conned, they questioned the manager of the restaurant and received a refund.
An executive at
Orange Wok
, said the Velachery restaurant imposed a 5% service charge. “But it is optional,” he said. “We’ve put up a notice stating as much. They can pay if they are satisfied with the service.”
Consumer activist
Vishnu Rao
said service charge is like a tip and should not be on the bill. “But restaurants impose it on unsuspecting customers,” he said. “Even customers who know better quietly pay up because they don’t want to create a scene.”