Now customers can decide whether they pay the service charge or not at restaurants. The Centre on Friday has approved new guidelines for eateries: the new norms giving consumers the right to decide service charge they wish to voluntarily pay on a hotel or restaurant bill.
Food and Consumer Affairs Minister Ram Vilas Paswan said that the guidelines made service charge totally voluntary not mandatory which means restaurants and hotels could not force customers to pay service charge and the customers can refuse. It will be sent to all the states for required action.
Paswan tweeted, “The government has approved guidelines on service charge. As per the guidelines, service charge is totally voluntary and not mandatory now. Hotels and 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.”
This is good news for all customers but surely not a good news for the hotel industry. President of the National Restaurant Association of India, Riyaaz Amlani said, “Guidelines are not laws. Restaurants will continue to levy service charge” unless the government comes up with a legislation to prevent them.
The government’s legal team drafted the two-page advisory and it is the second attempt in four months. In December, 2016 the first advisory was issued and it did aware the customers that they can refuse to pay.
A senior consumer affairs ministry official told PTI, “If there is mandatory levy of service charge, customers can file a complaint in the consumer court.”
The Hotel and Restaurant Association of Western India (HRAWI) annoyed with the guidelines. It protested the service charge levying is a global practice and a legitimate tax.
HRAWI president Dilip Datwani said, “Service charge is a global practice and one that has been in force in India for more than half a century. The charge is neither hidden nor disguised. It is categorically and boldly mentioned in the menu.”
He added, “A customer patronises a food outlet with the full knowledge that he or she will be levied a service charge. It is not just hospitality (sector), but many businesses levy such charges.
We cannot understand why we are being singled out.”
Many restaurants put up notices at the entrance, declaring that they would charge the service charge up to 10%. In some cases, hotels and restaurants are warning customers from entering the hotel premises if they are not agree to pay the mandatory service charge.