Service charge by hotels/restaurants not mandatory: Govt

NEW DELHI: Next time you pick up the tab at a hotel or a restaurant, you can refuse to pay the service charge if you are not satisfied with the services.

The Ministry of Consumer Affairs, Food & Public Distribution issued a notification today, asking the state governments to direct hotels and restaurants to disseminate information through display at an appropriate place that the service charges are discretionary/voluntary and a consumer dissatisfied with the services could have them waived off.

The ministry had received a lot of complaints from consumers about the issue. “A number of complaints from consumers have been received that hotels and restaurants are following the practice of charging ‘service charge’ in the range of 5-20%, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him,” the ministry said in the notification.

When the ministry sought clarification from the Hotel Association of India, it said the service charges were completely discretionary and if customers were dissatisfied with the experience they could have them waived off, the notification states.

Highlighting provisions under the Consumer Protection Act, 1986, the ministry said this law provides that a trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice.

A consumer can make a complaint to the appropriate consumer forum against such unfair trade practices.

Restaurants charge 12.5 per cent VAT and 6 per cent service tax to the bills, apart from service charges.

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