Millennium Post

Consumers can't be forced to fork out service charge by hotels, eateries

From now on hotels/restaurants won't force you to cough up service charge along with the food bill as the government has approved guidelines making service charge a totally voluntary practice. Announcing the decision, Union Food and Consumer Affairs Minister Ramvilas Paswan said, "As per the guidelines service charge is totally voluntary and not mandatory now. Hotels/restaurants should not decide how much service charge is to be paid by the customer and it should be left to the discretion of the customer."

The guidelines are being sent to states for necessary action at their end. The move comes amid heated altercations between patrons and employees at pubs and eateries. Many experts felt that the government should clear the confusion by doing away with the service charge in order to avoid acrimony between hoteliers and customers.

"Placing of an order by a customer amounts to his/her agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging for anything other than the aforementioned, without the consent of the customer would amount to unfair trade practice as defined under the Act," the guidelines stated.

The guidelines further stated that a tip or gratuity paid by a customer is towards hospitality received by him/her beyond the basic minimum service already contracted between him/her and the hotel management. The service charge is a separate transaction between the customer and the staff of the hotel at the customer's discretion, so it can't be mandatory, the notified rules said.

Earlier in January, the Department of Consumer Affairs had asked state governments to advise hotels or restaurants to display information on their premises that 'service charges' are discretionary.

It said, "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 per cent, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him."

The ministry had sought clarification from the Hotel Association of India, which replied that "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 deemed to be accepted voluntarily."
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