Skip to navigationSkip to content
SERVICE CHARGE

Paying a tip—or not—may now be the most embarrassing act at an Indian restaurant

Food-service charge
Reuters/Ahmed Jadallah
To serve or not to serve.
By Suneera Tandon
Published Last updated This article is more than 2 years old.

To tip or not to tip? Indian diners are in an embarrassing quandary.

A Jan. 02 government of India notification has asked restaurants to do away with the mandatory service charge levied on patrons as a substitute for tipping. Instead, it leaves it to the patron to pay more. Following complaints, the department of consumer affairs concluded that the levy of between 5% and 20% is a discretionary expense that a dissatisfied customer may choose not to pay.

Those who dine out are frequently baffled by additional costs and taxes mentioned in the bill. These include the 12.5% value added tax and a 6% service tax in addition to a service charge. The service charge amount usually varies in each restaurant and is rarely justified to the customer.

However, restaurant owners are up in arms against the government’s move to make it optional.

“A restaurant or a hotel has every right to charge a fee for the service it provides, and also (decide) the quantum of the fee. A consumer has every choice not to come the next time,” Riyaaz Amlani, CEO of Impresario Entertainment and Hospitality and head of the National Restaurants Association of India (NRAI), told the Mint newspaper.

Fearing a loss of revenue, the restaurateurs have sought to move court.

Officials, on the other hand, have said that not giving customers an option or a disclaimer is an unfair trade practice. Disclaimer, here, refers to informing a patron in advance that the bill will include additional charges.

Meanwhile, consumers are in a spot. After all, making service charge optional leaves the onus of paying extra on them. So, if dissatisfied with a restaurant’s service, a patron is left with the unsavoury option of making a case to not pay extra. Now, that could be awkward at the end of a meal.

That’s not all.

Restaurants could now readjust the prices on their menus to make up for the loss. “Rentals, competition, and salaries are rising. Restaurants will have to take a couple of days to work on alternate ways to meet these costs,” Manu Chandra, chef and owner of Monkey Bar chain of restaurants, told The Times of India newspaper.

Service charge or not, the customer is hardly king even now.

📬 Kick off each morning with coffee and the Daily Brief (BYO coffee).

By providing your email, you agree to the Quartz Privacy Policy.