You need not cough up tax for sloppy service at restaurants: Govt

In a major relief to consumers who are being forced to shell out extra bucks despite getting poor service at restaurants, the government has allowed consumers to pay the service tax on their satisfaction. The order means that if you eat out and are not happy with the service, you can refuse to pay the service fee that’s automatically tacked on to your bill by many restaurants. 

“The Centre has sent a letter to all the states in this regard and asked them to take necessary measures for its implementation. States have been also asked to promote the move by launching a mass campaign,” a senior official said.

According to the official, the government is also mulling penal action against all those restaurants/hotels that violate the government order. 

“In the service segment, the consumer is king and on their complaint of poor service, if any restaurant/hotel charges a service charge, the consumer can report the whole matter through consumer helpline number. After verifying the issue, the necessary penal action would be initiated against a particular hotel,” the official said.

“The service charge, which ranges from 5 to 20 per cent and is added to bills instead of tips, cannot be mandatorily applied by restaurants. The automatic applying of a service fee violates fair trade practices,” the official said.

“Restaurants (sic) are billing service charges in addition to taxes. Service charge is optional. The consumer has the discretion to pay or not,” Consumer Affairs and Food Minister Ram Vilas Paswan said in his tweet.