A number of complaints from consumers have been received over the practice of hotels and restaurants charging a ‘service charge’ ranging between 5-20 per cent, in lieu of tips, which consumers are forced to pay irrespective of the kind of service provided to them. 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 Central Government’s Department of Consumer Affairs asked for a clarification from the Hotel Association of India. The latter replied that the service charge is completely discretionary and can be waived off by customers should they be dissatisfied with the dining experience. Therefore, it is deemed to be accepted voluntarily.
The Department of Consumer Affairs has asked state governments to sensitize companies, hotels and restaurants in the states regarding the aforementioned provisions of the Consumer Protection Act and also to advise hotels or restaurants to display information on their premises that the ‘service charges’ are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.
Although no one can guarantee that the service charge amount will not be added by restaurants in your bill.