🍽️ The effects of no service charges

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The Centre’s recent debate over levying a service charge has got restaurateurs spooked. Here’s what they think will happen once service charges are removed.

Story so far: According to the Department of Consumer Affairs, levying a service charge on consumers is an “unfair trade practice”. Usually, consumers get the service tax mixed up with a service charge and end up paying it. 

  • When this is simply tacked on one’s bill without the consent of the consumer, it adds an added expense that the businesses are responsible for.
  • Restaurateurs say that service charges are worker-friendly, transparent and have been recognised by many judicial orders.

For the workers: The restaurant business was hit hard during the pandemic, and this led to several people losing their jobs or accepting those with severe pay cuts. Restaurant owners believe that removing service charges is a very anti-worker approach to consumer safety.

  • Other restaurants use the service charges to incentivise workers for better performance. Any other use of it would make the collection unethical.

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