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The LocalCircles report called for the service fee to be an optional tax left to consumers’ discretion based on their experience. (Actor/Getty Image)
A LocalCircles survey report said that consumers who are flocking to air-conditioned restaurants in increasing numbers are having to pay high service fees even if they are not satisfied with the services.
Air-conditioned restaurants across India continued to charge consumers a compulsory service charge, indicating a lack of compliance with government guidelines, according to a survey by LocalCircles. The results of the survey showed that about 43% of consumers surveyed have paid service charges in AC restaurants in the past three months, while 9% have removed them.
Automatic service charge charging has long been a contentious issue with the Delhi High Court’s comment on the CCPA’s ban creating confusion in the meantime. An argument between diners and staff over the issue even escalated into an all-out brawl in a Noida restaurant last month.
The CCPA in July 2022 issued guidelines to ban service charges, but the same has been challenged in court by the National Restaurant Association of India (NRAI) and the Confederation of Hotel and Restaurant Associations.
The Delhi Human Services Center suspended the ban on April 12 this year but clarified that restaurants cannot display the accommodation order to customers in such a way as to suggest that the charge has been approved by them.
The court said the accommodation is subject to the petitioners to ensure that the tax, in addition to the price and taxes, and the customer’s obligation to pay the same amount is duly and prominently displayed in the listing or elsewhere.
According to a LocalCircles report, meanwhile, consumers are flocking to air-conditioned restaurants in increasing numbers to pay high service fees even if they are not satisfied with the services.
The survey received more than 11,000 responses from citizens located in 303 districts in India.
Out of 11,066 surveyed, 43% stated that “the restaurant paid a fee and we paid,” while only 9% said they asserted their right and “had them remove” the service charge. It appears that not all AC restaurants automatically charge a service charge based on the response of 30% of respondents, while 18% stated that they were not aware of the issue because they “didn’t pay attention or someone else paid” the bill, ”the survey report said.
She added, “A comparative study of surveys conducted in September 2022 and now in July 2023 when the restaurant industry is back in full swing, shows that consumers are still charging service fees in a robust manner rather than in a voluntary or voluntary manner as per the Guidelines.”
The report called for the service fee to be an optional tax left to consumers’ discretion based on their experience.
“Most restaurant associations maintain the position that service fees help employees and even consumers when the reward becomes transparent. However, most consumers were against the idea that restaurants charge for service aggressively or by default in billing, particularly when the service experience is not good and should instead be a suggestive fee with an option for the consumer to provide consent or fill or check the box.”
About 66% of the respondents were men, while 34% were women. While 47% of the respondents were from Level 1, 36% were from Level 2 and 17% of the respondents were from Level 3, 4 and rural areas, the report said.
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