Mumbai Restaurant Fined Rs. 25,000 for Imposing ‘Mandatory’ Service Charge

A restaurant in Mumbai has been fined Rs. 25,000 by a district consumer commission for imposing a ‘mandatory’ 5% service charge on a customer’s bill. The commission also ordered the restaurant to refund the Rs. 29 service charge to the customer.

The complaint was filed by lawyer Yogesh S Patki against Girgaon-based Cream Centre owner Prince Cuisines Pvt Ltd in 2017. The South Mumbai District Consumer Disputes Redressal Commission recently ruled in favor of the lawyer, describing the service charge as “highly objectionable” and “illegal.”

The commission emphasized that the restaurant’s services, including its ambience, air conditioning, crockery, carpets, furniture, and staff, are part of the overall dining experience and should not be bundled into a mandatory service charge. It stated that the collection of a 5% mandatory service charge from customers is not justified and is against the law.

Additionally, the commission clarified that tipping is a matter between the customer and the service staff, and the hotel management should not be involved in this process.