Chintan Shah (NA) 14 April 2010

Service Charges by Restaurant over and above Menu prices

Dear Expert collegues,

Recently I visited a restaurant. The restaurant charged me 10% service charge over and above what was the total of the items that I ordered as per menu. In the menu on the last page there was a small note which read that the consumer will have to pay 5 % over and above the amount of bill. Now there are two questions:

1. Can't the prices mentioned in the menu be considered as MRP and thereby the restaurants must be barred from charging anything else?

2. Further isn't it so that the prices quoted in the menu against individual items must include charges for all the services of the restaurant?

3. Further is a complaint in the consumer court maintainable in this regard?

It may also be noted that the services provided by the restaurant includes normal services such as serving of meal, a good embience and hospitality in the form of waiters.

Please give your opinion supported by appropriate reasoning and case laws if any..

Your opinions are really needed as I need to file a consumer complaint at the earliest.

Regards

CA Chintan Shah

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2 Replies

Kiran Kumar (Lawyer) 14 April 2010

first of all, the MRP is not fixed by the govt. but the rate of tax is fixed by the govt.

so in my opinion in present scenario, in the absence of any specific rules, it all depends upon the Seller to fix rates and charge tax accordingly.

had it been a case of overcharging then in my opinion you could have succeeded in consumer complaint.

lets c what my other Ld. friends advice.

Chintan Shah (NA) 14 April 2010

Dear Kiranbhai,

The restaurant has charged service charge on the menu items and not tax. When one reads the menu you don't know that the service charges would be charged on the amount of your bill because the mention of such service charge comes only at the last page of the menu where they just write that service charge would be levied at 5% of the bill amount. There is no mention of service that they provide. This is purely to price the menu items at low and competetive rates and to increase the profit. Doesnt this amount to overcharging?

By the way thx for the reply.....

Regards

Chintan