Service charge by hotels & restaurants made not mandatory: Govt

Restaurants associations are advising their members across India to sensitise customers about service charges after the Department of Consumer Affairs said the payment was not mandatory.

Service charge not mandatory

Service charges billed by restaurants are optional and it is up to the customers to pay it, the department said on Monday. The department cited complaints that hotels and restaurants are levying an additional 5 to 20% in bills in lieu of tips, regardless of the kind of service provided.

Hotels advised to display that service charges are discretionary

The department asked state governments to sensitise hotels and restaurants and advise them to display at appropriate places on their premises that service charges are discretionary/voluntary and can be waived if a consumer is dissatisfied with the services. The department said arbitrary levy of this sum in lieu of tips amounts to an unfair trade practice.

“We have been receiving several complaints from consumers that they have to pay service charges even when they are not satisfied, so the government has issued an advisory that hotels or restaurants must give a choice to consumers whether they want to pay that money or not,” said Consumer Affairs Secretary Hem Pande. “The consumer is emboldened with this move. It is completely on the discretion of the consumer to pay the service charge or not,” Pande added.