Dining out, a pricey affair

The next time you head out to dine in an upscale restaurant in the city, be prepared to shell out extra bucks in the name of “service charges”. For Hyderabadis who love eating out, the dining experience has now become a pricey affair, thanks to the additional charges levied by most restaurants, apart from the regular taxes. Some restaurants charge up to 10 per cent on the already inflated bill leaving a hole in the customer’s pocket.
While young patrons do not mind shelling out big bucks for that perfect dining experience, the fact that they have to pay an exorbitant sum as a service charge doesn’t go down well with them. Consiglia Jayant, who recently dined at Indi Joe’s, a multi-cuisine restaurant by the BJN group at Banjara Hills was shocked when she discovered that the bill amount was much higher than expected. “For a bill of Rs 1,345, we ended up paying an extra of Rs 201 as VAT which is acceptable. But an extra Rs 146 as ‘service charge’ is unfair, considering we pay a sizeable amount for the buffet,” she says.
Sohini Ghosh, who works with a publishing house couldn’t agree more, “The fact that restaurants fleece patrons under the guise of service charge is putting off. We end up paying at least Rs 200 or more above the bill amount as just tax. Add to that, service charges increase the bill by a few hundreds more. After spending so much, there is no point leaving a tip.”
In fact, Hyderabadis are now wary of dining out as the bills are taking a toll on their already tight budgets in this current recession-hit economy. Rajesh Kandregula, a financial analyst, says, “It’s bad enough that we are paying 12.5 per cent as VAT. Add to that an additional 10 per cent as service charge and the bill amount is exorbitant.” He adds that if restaurants must charge a service charge, they should mention it in the menu card in order to prepare customers.
However, M.M.R. Subramaniam, tax consultant for the BJN group, defends, “The service charge levied depends upon the restaurant’s discretion. It is merely their way of charging for the services they render.”
But the “restaurant’s discretion” often proves expensive for patrons, admits Pradeep Kumar Dutt, secretary, Hotels and Restaurant Association of Andhra Pradesh. “Service charge is not commissioned by the commercial tax department. While a service charge of up to 10 per cent is permissible, patrons are heavily burdened by this fee when added to the VAT. Restaurants are losing out on customers as a result. In fact, some restaurants are now planning to do away with the service charge to draw more patrons.”

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* Deeba Khan,
Software professional
Most good restaurants already have high-priced menus, making eating out an expensive affair. They also expect us to pay VAT, service charge and a generous tip and that is hard on the pocket. At any meal, we end up paying at least 30 per cent towards taxes and service charges, which is not justified. It’s almost like they are extorting a mandatory tip from us.

* Neil Karkera,
Software professional
At a upscale restaurant, I wouldn’t mind paying the service charge, but then I wouldn’t leave a tip unless the service extraordinary. Of course if an average restaurant levied a service charge, I wouldn’t go back there again.