Service charge not mandatory at restaurants and hotels: govt

The Central government has directed the state governments to sensitize the companies, hotels and restaurants in the states regarding aforementioned provisions of the Consumer Protection Act, 1986.

Service charge on a food bill is not compulsory and a customer can choose to have it waived if not satisfied with the experience, the government said.

The Centre has also asked states to ensure that hotels/restaurants disseminate the information that service charge isn’t mandatory through displays on their premises.

Consumers have the “discretion to pay service charge or not”, the Department of Consumer Affairs (DCA) said on Monday, adding that the billing of service charge by restaurants in addition to taxes is optional.

The Consumer Protection Act, 1986 stipulates 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.

In accordance to the act, the department of Consumer Affairs called for clarification from the Hotel Association of India, which in response stated that the service charge is completely discretionary and, therefore, it is deemed to be accepted voluntarily.

In addition, it has asked state governments “to advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the ‘service charges” are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.”

"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.

So the next time you’re at a restaurant or a cafe and you’re not happy with the experience, remember — you have the right to say no to that service charge printed on your bill.