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The Taste by Vir Sanghvi: Why restaurants refuse to scrap service charges

22 0
27.10.2026

Somehow the issue of service charges at restaurants never goes away. It’s back in the news again after a Delhi hotel was fined for levying a service charge. But here’s the extraordinary thing about the controversy. Most customers, the courts, regulators and the government are largely in agreement: there is a serious problem with tacking service charges onto bills. But restaurant owners simply don’t care. They think the charge is totally fair and will go to any lengths to levy it.

ALSO READ: The Taste by Vir Sanghvi: An unnecessary controversy in Dubai over Michelin stars

The customer perspective is easy to understand. A service charge is supposed to reflect a customer’s joy at being given good service; it takes the place of a tip. How can restaurants (or hotels) just assume that you have liked the service and charge you for it?

Ever since the uproar started, over a decade ago, the best that restaurant owners can do is to claim that the charge is optional. Oh yes, they will still add it to your bill but you can complain and ask for it to be deleted from your bill, they will claim.

Regulator after regulator has ruled that a system where people have to opt out rather than opt in is inherently unfair to the customer. People should not be forced to engage in unpleasantness and demand that the charge should be deleted. They........

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