Govt says service charge at hotels, restaurants not mandatory

In the wake of a numerous complaints from consumers about being forced to pay service charge in the range of 5-20 per cent, in lieu of tips, irrespective of the kind of service provided to them, the government has said that consumers can now refuse to pay the service charge if they are not satisfied with their dining experience.

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 this context, 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.

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

In addition, it has asked state governments to advise the hotels and 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.