High Court Grills Restaurants on Service Charge Practices
The Delhi High Court questioned the legality of mandatory service charges by restaurants, pointing out the excessive pricing beyond MRP for ambience and services. The court highlighted consumer concerns over unfair trade practices and forced taxation, pressing the restaurant associations for justification.
- Country:
- India
The Delhi High Court raised concerns regarding the mandatory service charges levied by restaurants, questioning their fairness and legality. Addressing representatives from hotel and restaurant associations, the court emphasized that charging beyond the MRP for providing ambience and services appeared unreasonable.
A bench led by Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela challenged the associations for justifying why diners should endure inflated bills, noting instances of customers paying Rs 100 for Rs 20 water bottles without proper explanation for the surcharge.
In a March ruling, the court deemed such practices as coercive and contravening public interest, emphasizing the consumer's double burden of GST on these questionable service charges. The bench signaled its intent not to remain passive amid these controversial billing practices.
(With inputs from agencies.)
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