Mumbai Restaurant Continues to Levy Service Charge Despite Being Fined

A restaurant in Mumbai has shown blatant disregard for a district consumer court’s ruling by continuing with its service charge practice. Initially, the restaurant imposed a mandatory 5% service charge and was fined for it in April this year. However, the restaurant has now increased the charge to nearly 10% of the total bill. A diner shared a picture of the bill online, expressing concern.

“Even after service charge levy by restaurants being termed as illegal by the courts, Cream Center blatantly violates the law by applying the same,” wrote X user Kurush Daruwalla while sharing a picture of the bill.

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The bill reveals the service charge imposed by a Mumbai restaurant. Cream Centre applied a service charge of Rs 290.50, amounting to nearly 10 per cent of the total bill.

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In April this year, a district consumer commission fined a Mumbai restaurant for imposing a mandatory 5 per cent service charge on a customer’s bill. The commission imposed a fine of Rs 25,000 and ordered the restaurant to refund the Rs 29 service charge. This ruling came in response to a complaint filed in 2017 by lawyer Yogesh S. Patki against Gurgaon-based Cream Centre owner Prince Cuisines Pvt. Ltd. The commission ruled in favour of the lawyer, deeming the service charge “highly objectionable” and “illegal”.

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The commission said, “It is the bouquet of additional services that complete the experience of customers who choose to dine in at the restaurant. Building this narrative to collect a 5 per cent mandatory service charge from customers is highly objectionable as well as illegal and hence cannot be justified at all.”

In its defence, the company stated that it is a leading service provider in the hospitality industry and imposes charges only on customers who dine in the restaurant. It also emphasised that the service charge is displayed throughout the premises, including at the entrance, the front desk, and on the menu.