Consumers dissatisfied with CCPA restaurant service fee standards

The Delhi HC last week stayed the new guidelines of the Central Consumer Protection Authority (CCPA) restraining restaurants from adding a service charge by default to food bills.
Nearly seven in 10 consumers are unhappy at the Delhi High Court order staying recent government guidelines. (Wikimedia Commons)
Nearly seven in 10 consumers are unhappy at the Delhi High Court order staying recent government guidelines. (Wikimedia Commons)

Nearly seven in 10 consumers are unhappy at the Delhi High Court order staying recent government guidelines that prohibited restaurants from levying service charges automatically on food bills, a new report showed on Tuesday.

The Delhi HC last week stayed the new guidelines of the Central Consumer Protection Authority (CCPA) restraining restaurants from adding a service charge by default to food bills.

A new LocalCircles survey found that 70 percent of respondents plan to either refuse to pay the service tax or avoid restaurants that levy it.

"Consumers contend that most diners in air-conditioned restaurants tend to tip the staff in the normal course according to the service quality," the findings showed.

A breakdown of those opposed to service charges shows that 20 percent plan to put up a fight and not pay the additional charges, 37 percent of respondents plan to avoid restaurants that levy service charges, while 13 percent were planning to avoid restaurant eating.

In the remaining cases, 28 percent expressed willingness to pay the service charge if it was part of the bill while 2 percent of respondents were undecided on their course of action. LocalCircles conducted a national survey which received over 21,000 responses from consumers located in 291 districts.

LocalCircles said it will share the findings of this report with the CCPA. (IANS)
LocalCircles said it will share the findings of this report with the CCPA. (IANS)

When asked about their experiences, among those with poor or mediocre service experiences, 23 percent stated it had happened once or twice, 18 percent said it happened three to five times and even worse, 24 percent of respondents said it had happened as many as 6-10 times while 6 percent were among those who had undergone a bad service experience despite service charge being levied in the bill, more than 10 times.

LocalCircles said it will share the findings of this report with the CCPA and the Department of Consumer Affairs as they move to defend the rights of the consumers.

In its response to the verdict, the National Restaurant Association of India (NRAI) said it has always been steadfast in its assertion that there is nothing illegal in levying service charges and it is a very transparent system.

The CCPA has said that the consumer may request the concerned hotel or restaurant to remove the service charge from the bill amount. The consumer may also file a complaint against unfair trade practices with the Consumer Commission. (AA/IANS)

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