Months after the Centre reiterated that restaurants cannot levy a mandatory service charge, customers are flagging what they call a “backdoor revival” of the fee—this time under a different name.
A recent bill from Banana Leaf shows a separate line item titled “Staff Welfare” amounting to ₹108.75 on a subtotal of ₹2,175, before GST. The total bill, including CGST and SGST at 2.5% each, stood at ₹2,393. The “Staff Welfare” charge appears to be calculated at 5% of the food bill—similar to the service charge many restaurants earlier imposed.
Govt removed service charge from restaurants but now many have renamed it “staff welfare”. Old wine in a new bottle. Customers are still being forced to pay extra beyond menu prices. This is unfair and misleading. Govt must take strict action and clearly make any charge not… pic.twitter.com/hbglaRU9Hp
— Tajinder Bagga (@TajinderBagga) February 21, 2026Background: Service Charge Advisory
In 2022, the Department of Consumer Affairs issued guidelines stating that hotels and restaurants cannot automatically or by default add a service charge to bills. The government clarified that:
Service charge is voluntary, not mandatory.
Customers can request its removal.
Restaurants cannot deny entry or service for refusal to pay it.
Subsequent directions from the Central Consumer Protection Authority reinforced that levying service charge by default amounts to an unfair trade practice if not clearly optional.
‘Old Wine in a New Bottle’?
Consumer rights activists argue that renaming the levy as “Staff Welfare,” “Employee Benefit Fund,” or similar labels undermines the spirit of the government’s advisory.
“Whether it’s called service charge or staff welfare, if it’s automatically added and not clearly optional, it raises compliance concerns,” said a Mumbai-based consumer law expert.
Several diners claim they are often unaware of such charges until the final bill arrives. In many cases, the charge is not prominently disclosed on the menu.
