You Need to Pay Service Charge at Restaurants Only if You Feel Like

A file image of a person clearing out his bill at a restaurant.

New Delhi: CNN-News18’s ‘Why pay extra’ campaign has yielded results with the government mandating that service charge at restaurants is optional and it is up to the consumer whether to pay service charge or not.

The Department of Consumer Affairs in a note says the consumer has the ‘discretion to pay service charge or not’.

The government has also asked restaurants and hotels to display boards informing that service charge is voluntary.

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 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.

In this context, the Department of Consumer Affairs called for clarification from the Hotel Association of India, which 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 to be accepted voluntarily.

The Department of Consumer Affairs has asked the State Governments to sensitize the companies, hotels and restaurants in the states regarding aforementioned provisions of the Consumer Protection Act, 1986 and also 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.