Restaurants cannot add service charges to food bills

By on June 3, 2022 0
Restaurants are free to raise the prices of their menus since there are no price controls on them, but they cannot levy a service charge as this would mislead the consumer, said the union minister Piyush Goyal.

The minister also justified the government’s decision to ban wheat exports, saying it helped avert a possible “catastrophic disaster” as prices could have “skyrocketed”.

Goyal, who is in charge of the ministries of trade and industry as well as food and consumer affairs, dismissed restaurants’ claim that they would suffer a loss if service charges were scrapped and said that wanted to pay higher wages to employees, they were free to raise the rates on their prices.

“We haven’t stopped restaurants from raising their prices. Restaurants will be wrong to say they will suffer losses if the service charge is removed,” he told a news conference on Friday. . If there is a hidden cost, people won’t know the real price, he said, adding, “We can’t mislead people by charging for the service.”

However, customers, at their discretion, can “tip” separately, he said.

His statement comes after the government said on Thursday that the charge was “unlawful” and had no “legal penalties”, implying that restaurants should not collect service charges.

“Wheat export ban is not anti-farmer”

The minister said the government was receiving complaints from consumers about service charges imposed by restaurants.

Goyal said the price of wheat fell by 5 rupees per kilogram after the government banned food grain exports last month. The ban was important “to make sure inflation doesn’t skyrocket and for our (food) security”, he said.

The minister dismissed claims that the decision was anti-farmer. Farmers had already sold their produce and the government was only able to source 600,000 tonnes of wheat after the ban was imposed, he said.

The government had banned wheat exports on May 13 to control rising domestic prices, as local production was hit by high temperatures and global supply shortages due to the Russa-Ukraine war. However, it allowed exports against valid irrevocable letters of credit issued no later than May 13, as a transitional provision.

Later, he ordered the registration of LCs to ensure that only exporters with valid and genuine LCs get the final green light.

“Prices (of wheat) have already fallen by Rs 5 per kg in public markets and we are saved from a catastrophic disaster that could have happened,” Goyal said, explaining that the ban decision was important because indiscriminate shipments beyond a point could “have harmed our own food security and prices could have skyrocketed”.

He said an inter-ministerial committee, made up of officials from the ministries of food, agriculture and foreign affairs, had been set up to review wheat requests from neighboring and friendly countries, which would ensure that the wheat sought by these nations was destined for their own needs. .

“We insist that any country that wants wheat from us asks only for its local people and pledges not to allow its export,” Goyal said.

The minister said the government was investigating whether any exporters had gamed the system and shipped wheat backdating LCs after the ban. “The strongest action” will be taken against these players, he warned.

Regarding the rejection of Indian wheat by Turkey, he said that it was a consignment sent by

in the Netherlands which was diverted to Turkey without the knowledge of the company.

“The Netherlands had purchased this shipment from ITC and was delivering to Turkey. No one doubts ITC’s quality controls. We are confident that Indian wheat is of the highest quality and ITC’s quality standards are strict. shipping from Turkey. Turkey has never traded wheat with India,” Goyal said.

Open network for Ecomm

Goyal said the Open Network for Digital Commerce (ONDC) would provide equal opportunities for small retailers to reap the benefits of the digital world and enable them to trade on a common platform, as it aimed to democratize the e-commerce industry. fast-growing, helping small retailers and reducing the dominance of online retail giants. The network aims to democratize e-commerce by bringing more kiranas and unorganized retailers online.

Goyal said that the very existence of small retailers could have been threatened by the growing influence of large format e-commerce companies which engaged in several irregular practices and were under investigation by the Management of the app.

Citing the example of the United States, Goyal said the big e-commerce giants had hit small retail stores hard, leading to large-scale unemployment.

“We don’t want this to happen in India. We want them (small retailers) to have the opportunity to use technology to serve our consumers; we want them to have an equal opportunity to enjoy the fruits of the world digital; we want their data to be protected,” he said.

“Everyone is aware of the abusive practices followed by large e-commerce companies in terms of the preference they give to their own sister companies and where they hold stakes,” Goyal said, adding that such practices would lead to exploitation of vendors.

“ONDC will provide a large number of choices for consumers… In a way, it is a way to democratize e-commerce. It will provide equal opportunities to sell products and all consumers will have a good number of choice,” he said.