HC stays guidelines on service charges by restaurants

One-liner: The Delhi HC on Wednesday stayed the recent guidelines prohibiting hotels and restaurants from levying service charges automatically on food bills.

Direction: Justice Yashwant Varma, while dealing with petitions by the National Restaurant Association of India and Federation of Hotels and Restaurant Associations of India, said the issue requires consideration and directed the authority to file its reply.

Display it on menu: The court said the stay is subject to the petitioners ensuring the levy of service charge in addition to the price and taxes and the obligation of the customer to pay the same is duly and prominently displayed on the menu.

  • The court listed the matter for further hearing on Nov 25

Standing practice: Levy of service charge has been a standing practice in the hospitality industry for more than 80 years which is evident from the fact that the SC took notice of this concept way back in 1964, the petition said. 

Bottom line: In the June meeting, the petitioner association reiterated its stand and submitted that service charge was a common and accepted practice throughout the world.

Source: PTI