Service charge on your restaurant bill is not mandatory, Govt clarifies

You can choose not to pay service charges if you are not happy with the service at a restaurant, Consumer Affairs ministry clarified on Monday. 

“…the department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which have replied that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience he/she can have it waived off. Therefore, it is deemed to be accepted voluntarily,” Ministry of Consumer Affairs, Food and Public Distribution said in a statement.

This announcement preceded a number of complaints from consumers sent to the Ministry that hotels and restaurants were following the practice of charging 'service charge' in the range of 5-20%, in lieu of tips, which the consumer was forced to pay irrespective of the kind of service provided to him.

“The Consumer Protection Act, 1986 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 and that a consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices,” the Ministry said.

The Department of Consumer Affairs said that it has asked the State Governments to sensitize the companies, hotels and restaurants with regards to the above and also to advise the hotels and restaurants to broadcast information via displays at the appropriate places in the hotels and restaurants that 'service charges’ are discretionary in nature and a consumer dissatisfied with the services can have it waived off.