Courtesy or compulsion?Service Charge back in spotlight
India, Feb. 21 -- Often presented as customary rather than obligatory, the service charge is back at the centre of a wider debate on fairness and the ethics of tipping.
Recently, the Central Consumer Protection Authority (CCPA) directed China Gate's Bora Bora in Mumbai to pay a penalty of Rs.50,000. Following the Delhi High Court's March 2025 ruling that the mandatory collection of service charge by restaurants is contrary to law, the CCPA also took suo motu cognisance against 27 restaurants across the country over the compulsory levy.
While consumers have largely welcomed the move and the hospitality industry says rules are paramount, employees hope patrons will continue to reward good service through tips. We spoke to all sides.
"I love to tip when the service is great, but don't add it to the bill by default," says vlogger Deepti Bajaj.
Parul Sharma, a second-year student from Shimla, agrees: "How can you decide how much tip I want to pay or can afford? We are students. If you levy a fixed service charge, it affects us a lot. We tip according to our allowance."
"We operate in complete compliance with the law. If customers want to tip, they can, and it is voluntary," say Vipul Sabharwal and Ashish Sabharwal, owners of Meraak.
From the staff's perspective, the issue is deeply practical amid rising living costs. "We respect the laws and guidelines, and no charge should be levied without consent. However, the efforts of hospitality staff also deserve recognition. Service charges and tips are passed down fairly to the staff. It keeps morale high and helps employees make ends meet," says Chirag Verma, director of sales and marketing, Ramada Gurgaon Central.
Atharva Sanjay Mahadik, a Mumbai-based bartender, adds, "Our salaries are not great and working hours are long. Tips are shared among staff and help us manage expenses. Our janitor sets aside his share for his daughter's education. For many of us, tips are society supporting each other."...
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