February 22, 2025

People are talking about restaurant bills now. With the government saying that the service charge (as distinct from service tax, which has to be paid mandatorily) component should be optional – that a customer should pay only if he or she gets service of an expected quality, otherwise they can ask the eatery to revise the bill, the people have started talking about their horrible experiences in renowned restaurants where they were forced to pay 20% service charge on food bills despite getting atrocious service. Trade bodies of restaurants have retorted by saying that they will continue with the service charge and have haughtily added that patrons are welcome not to visit if they do not wish to pay the same.

Restaurants add various charges on their bills. One such is establishment charges. Taking the plea that they are providing diners with plush seating, lavish décor and air-conditioning, eateries charge a premium of anywhere between 200 to 500 percent on bottled water and branded soft drinks on the maximum retail price. If one carries one’s own drinking water, many times eateries do not provide empty glasses for the same. People have long resented this.

Logic provides that if a business is being run as a sit-down fine dining place, the price of food must cover all overheads the entrepreneur incurs. If dishes are priced upwards of Rs 350 for a portion, the waiter who serves the dishes must get his salary from that. Levying additional charges is abominable. Restaurants are already talking about how prices will be upwardly revised if they are not allowed to charge for service.

But keeping the service charge component optional is sure to start many ugly fights in restaurants. The best way would be for eateries to prominently display a board saying “this restaurant levies XX% service charge on its bill” and leave it to the diner whether he wishes to eat there or not. The same message should be prominently printed on all pages of the menu instead of being relegated to a small, 7 point line at the bottom. Many patrons end up leaving tips even after paying service charge in the bill as they do not know they have been charged separately for the service.