The Delhi High Court on Tuesday questioned why restaurants should recover service charges from consumers as an “additional” and “separate levy." A bench headed by Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad remarked that a common man perceives service charge as a government levy and restaurants can increase their food prices to absorb this charge instead of recovering it in the form of an additional charge over and above the total bill.
The high court was hearing an appeal by the Centre against a single judge's order staying its guidelines prohibiting hotels and restaurants from levying service charges automatically on food bills. It listed the matter for hearing on August 18.
Counsel appearing for one of the restaurant associations said that the service charge was not a government levy and it was for the benefit of the restaurant employees and was not a substitute for “tips”.
