Service Charge row: Centre issues advisory to State Governments

New Delhi [India], Feb. 7: Reacting to a number of complaints through the National Consumer Helpline received against the mandatory service charge levied on bills of food and beverages by some restaurants despite the rule sanctioning it voluntary, the Department of Consumer Affairs issued advisory to the State Governments to sensitize the companies, hotels and restaurants in the states regarding the provisions of the Consumer Protection Act, 1986 on unfair trade practices.

The Government has received multiple complaints from consumers against some hotels and restaurants who have been levying service charge at the rate of 5-20 per cent on the bills in lieu of tips which a consumer is forced to pay irrespective of the his liking the service.

The restaurants were also advised to disseminate information that the 'service charges" are discretionary/ voluntary and if a consumer is dissatisfied with the services he can have it waived off.

The government has earlier issued an ordinance stating that a consumer can now have the service charges waived off if his/ her dining experience is not found to be satisfactory.

Source: ANI