Delhi HC slams eateries on service fee charged on food bills

A high court bench questioned the need to levy a service fee on food bills.

A high court bench recently questioned why there was a need to levy a service fee on food bills on top of the hiked MRP being charged to customers. On Friday, the Delhi High Court came down heavily on restaurants charging a service fee from customers while ready selling products with a hiked MRP.

Delhi High Court questions the need to levy a service fee on food bills.

Devendra Kumar Upadhyaya and Tushar Rao Gedela, a bench of the Chief Justice, questioned why a service and ambience were not covered in the already high MRP charge in the name of experience. It questioned why there was a need to levy an additional service charge from customers. The bench asked the counsel representing the associations for hostels and restaurants, “You (restaurants) are charging more than MRPs, for the experience being enjoyed by the person visiting your restaurant. And you’re also charging the service charges for the service rendered… providing an ambience for a certain kind of experience will not include the services you’re providing? This, we don’t understand.”

Delhi HC cites an example of a ₹20 water bottle sold for ₹100.

The High Court bench, citing an example of a ₹20 water bottle being sold for ₹100 at restaurants, asked the National Restaurant Association of India (NRAI) and Federation of Hotels and Restaurant Associations of India (FHRAI) why the eatery was not specifying that the extra ₹80 was for the ambience being provided. The bench was quoted as saying by news agency PTI, “This can’t be like this. This is an issue… Providing the ambience will form part of the services being provided by you… Can you charge any amount over and above the MRP? And for the service you’re charging, what’s that 80 rupees for?”

The HC’s remarks came months after a single judge of the court held that service fee cannot be made mandatory by restaurants in a camouflaged and coercive” manner, terming it unfair trade practice.