IMPORTANT: You Don't Have to Pay Service Charge, If You Don't Want To at Hotels and Restaurants

The government on Monday said that restaurants billing 'service charges' in addition to taxes is optional and the consumer has discretion to pay 'service charge' or not.

The Department of Consumer Affairs in a notification asked the states to "advise the Hotels and Restaurants to disseminate information through display at the appropriate place in the hotels and restaurants that the "service charges" are discretionary and voluntary and a consumer dissatisfied with the services can have it waived off".

The move came in the wake of a number of complaints that hotels and restaurants are following the practice of charging "service charge" in the range of 5-20 per cent, 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.

The service charge is not a government levy and should not be confused with the mandatory VAT or service tax.