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Diners Can Decline To Pay 'Service Charge' At Restaurants, Hotels, Says Govt

This 'service charge' usually ranges between 5-20%

02/01/2017 5:00 PM IST | Updated 02/01/2017 5:41 PM IST
Lonely Planet

Good news for diners: The government has clarified that paying service charge -- which usually ranges between 5 and 20 per cent -- and is added to bills by hotels and restaurants is, in fact, optional and not mandatory even if it's included in the bill.

That means customers can refuse to pay the amount if they are unhappy with the service, according to a notification from the Ministry of Consumer Affairs, Food & Public Distribution.

According to the notification, the Hotel Association of India has advised the government that the prevailing service charge "is completely discretionary and should a customer be dissatisfied with the dining experience he or she can have it waived off."

These charges are usually paid in lieu of tips for good service. So should you have a good dining experience, you might want to consider not waiving the amount.

Here's the full statement:

Consumer has discretion to pay 'service charge' or not: Department of Consumer Affairs

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, Central Government has called for clarification from the Hotel Association of India, which have 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 deemed 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.

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