While partially accepting a plea, the District Consumer Disputes Redressal Commission found a Mumbai eatery guilty of unfair trade practises and ordered it to reimburse the service tax. The Chili’s American Grill and Bar restaurant was the target of the complaint, which was made by a Borivali resident.
On March 2, 2019, Frank Mullakara, a resident of Borivali, went to dinner with a friend at the eatery at the Malad Inorbit Mall. For dinner, he had selected a bucket of chilled beer bottles and crispy chicken. The crispy chicken, however, was unappealing. After complaining, the restaurant replaced the crispy chicken, but the flavour was unchanged. However, they were charged a 10% service fee in addition to the basic sum of Rs 1,694.01 when they received the bill.
Mullakara complained that the service was poor and that the service tax shouldn’t have been applied; nevertheless, the employees argued with him in front of other customers, hurting their perception of him, so Mullakara paid and went. The restaurant said that because the service tax was already included in their billing system, it could not be withdrawn.
Then Mullakara went to the commission. He asserted that the restaurant had engaged in unfair trade practises by also collecting CGST and SGST on the service charge. However, the restaurant never responded, thus the order was given without their knowledge.
Mullakara cited a notification from the Ministry of Consumer Affairs, Food, and Public Distribution from 2016 that made it clear that paying service charges is completely optional and voluntary on the part of the customer, and that if the customer isn’t happy with the dining experience, the service charge can be waived.
Following an investigation, the Commission ruled that the restaurant must reimburse Mullakara for the service tax amount of Rs. 169.40, as well as 7% annual interest and Rs 10,000 in one-time aggregate costs for pursuing the issue.