India bans service charge at hotels and restaurants
July 5, 2022, 7:59 am

India bans service charge at hotels and restaurants

Indian cuisine consists of a variety of regional and traditional cuisines native to the Indian subcontinent. Given the diversity in soil, climate, culture, ethnic groups, and occupations, these cuisines vary substantially and use locally available spices, herbs, vegetables, and fruits - Photo. Pixabay

India's consumer protection authority has banned hotels and restaurants from levying a service charge on bills, the BBC reported.

It said, the order came after authorities said there had been an increase in complaints by customers being forced to pay the charge.

Restaurants often add a 5% to 15% tip to a customer's bill under a "service charge" category, according to the BBC.

But new rules say restaurants can no longer "add service charge by default or automatically" to the bill.

The new guidelines also bar restaurants from collecting tips from customer "under any other name" or "deny service or entry to customers who refuse to pay a tip".

An unsavoury row over tipping at restaurants has been brewing in the country for a few years, with customers complaining that they weren't informed about this extra charge.

CaCrowded street in Delhi, India (File photo: Pixabay)ption

In 2017, the government's consumer affairs department issued a set of guidelines saying that customers only had to pay the prices displayed on the menu card along with government taxes.

The department said that people could use their "discretion" on whether or not to leave a tip and that extra charges without the customer's consent amounted "to unfair trade practice".

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The government had instead encouraged restaurants to pay fair wages to its employees and increase product prices to meet the cost.

Restaurants have, however, continued to add the tip to the bill, leaving it up to patrons to contest the extra charge.

Last month, the government called a meeting with the National Restaurant Association of India (NRAI), saying it had received an increasing number of complaints from consumers that they were still being "forced to pay service charges, often fixed at arbitrarily high rates" and that "they are harassed if they request to remove it from the bill".

The NRAI, which represents more than half a million restaurants, had defended the practice, saying it was a "matter of individual policy" and levying such a charge was not "illegal".

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They also argued that the service charge brought additional revenue to the government too since restaurants paid a tax on what they charged customers.

The BBC noted that the new guidelines say that consumers can lodge their complains online or through the National Consumer Helpline.

Source: BBC

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.