New Delhi, 4 June: Restaurants are free to raise their menu prices since there are no price controls on them, but they cannot levy a service charge as that would amount to misleading the consumer, union minister Piyush Goyal said.
The minister also justified the government decision to ban the exports of wheat, saying that it helped avert a possible “catastrophic disaster” as prices could have “skyrocketed”.
Goyal, who is in charge of the commerce and industry as well as food and consumer affairs ministries, rejected the claim of restaurants that they would suffer a loss if the service charge was withdrawn and said they wanted to pay higher salaries to employees, they were free to increase rates on their prices.
“We have not stopped restaurants from increasing their prices. It will be wrong for restaurants to say that they will suffer losses if the service charge is withdrawn,” he said, addressing a press conference on Friday. If there is a hidden cost, people will not know the real price, he said, adding: “We cannot mislead people by charging for service.”
His statement comes after the government on Thursday said the charge was “illegal” and did not have any “legal sanctity”, implying that restaurants should not be collecting a service charge.
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