Court wants eateries to rename 'service charge'

The Delhi High Court on Wednesday asked the National Restaurant Association of India and Federation of Hotels and Restaurant Associations to consider changing the "service charge" terminology to some alternative term like "staff welfare charges" so that the consumers are not misled into believing it to be a government tax.

Justice Pratibha Singh also directed the hotels and restaurants to refrain from exhibiting on their menus that service charge levied has been approved by the High Court following an objection by the central government.

It also asked the associations to convene a meeting to ascertain the number of members who are willing to inform their customers that service charge is voluntary and pass a resolution on the percentage of its members who mandatorily impose service charge on their bills. The affidavit giving all these details must be furnished to the court by July 24, the next date of hearing.


The Delhi High Court has stayed the Central Consumer Protection Authority's July 4 ban on unilaterally levying service charge.