7 in 10 consumers unhappy with stay on CCPA's restaurant service charge norms

New Delhi, July 26

Nearly seven in 10 consumers are unhappy at the Delhi High Court order staying recent government guidelines that prohibited restaurants from levying service charge 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 70 per cent of respondents plan to either refuse paying the service tax or avoid restaurants that levy it.

"The contention of consumers is 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 per cent plan to put up a fight and not pay the additional charges, 37 per cent respondents plan to avoid restaurants that levy service charges, while 13 per cent were planning to avoid restaurant eating.

In the remaining cases, 28 per cent expressed willingness to pay service charge if it was part of the bill while 2 per cent 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.

When asked about their experiences, among those with poor or mediocre service experiences, 23 per cent stated it had happened once or twice, 18 per cent said it happened three to five times and even worse, 24 per cent respondents said it had happened as many as 6-10 times while 6 per cent 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 so as they move to defend the rights of the consumers.

In its response to the verdict, the National Restaurant Association of India (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.

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