Delhi High Court said this about the service charge in the restaurant, the government had banned

Photo:FILE Service Charge

Delhi High Court NEW DELHI: Questioning the levy of service charge as an additional or ‘separate’ fee from customers in restaurants, the U.S. on Tuesday said the method of increasing the prices of food products can be adopted instead. The observation was made by a bench of Chief Justice Satish Chandra Sharma and Justice Subramaniam Prasad during the hearing of an appeal filed by the central government. Earlier, a single bench of the High Court had stayed the Centre’s direction restraining hotels and restaurants from charging service charges from customers.

Restaurants can increase the prices of food items

A bench headed by the Chief Justice said that a common man understands the service charge charged in restaurants as a tax levied by the government. In such a situation, if the hotel and restaurant want to charge more amount from the customer, then they can increase the price of the food and drink served by them. Then they will no longer need to charge service charges separately in the bill. It was stated by the restaurant organizations that the service charge is not a government tax and is levied for the benefit of the employees working in the restaurant. The court disagreed with this argument and said, “Increase the salary of your employees, we will listen to you. By the way, the service charge is not related to the restaurant employees but to the consumers.” With this, the hearing of the matter was adjourned till August 18.

guidelines were suspended

The Central Consumer Protection Authority (CCPA) had announced to challenge the Delhi High Court order staying the guidelines on levying service charges in hotels and restaurants. Significantly, the National Restaurant Association of India (NRAI) and Federation of Indian Restaurant Associations had challenged the guidelines issued by the CCPA on July 4. Hearing in this matter, the Delhi High Court had stayed these guidelines on July 20.

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