The court in the petition filed by the National restaurant association of Indian and the Federation of Hotels and restaurants association of India asked the Hotel and restaurant association to consider changing the service charge into a staff welfare fund.
The Additional solicitor general appearing for the central consumer protection authority alleged that the service charge imposed by the restaurants are confused as government imposed tax and it was also alleged that many restaurants are misinterpreting the interim order of the court to legitimize the service charge.
The association contended that the reason behind such service charges equalize the distribution of tips amount and such practice is in continued for a long time and has also been recognized by the high court & Supreme Courts through its various judgements.
The court held that the interim orders staying the Central Consumer Protection Authority (CCPA) guidelines stating that hotels or restaurants should not add service charges automatically, should not be seen as the High Court approving of service charges.
The court also asked the association to find out the percentage of Consumers willing to inform the customers that such a charge is not mandatory and that they can voluntarily contribute.
The court also asked the association to inform of the number of restaurants imposing service charges.
Thus the Affidavit will be filed on the same on 24 July 2023.