You are here: Home » Economy & Policy » News
Business Standard

Centre empowers customers to pay or decline service charges in restaurants

Onus now on states to enforce Centre's rules

Sanjeeb Mukherjee & Agencies  |  New Delhi 

China, food industry
Representative Image

Next time you go to a hotel or a restaurant, you can decide to pay the in the bill or not. If any establishment says the payment is mandatory, one may approach a Consumer Disputes Redressal Commission or Forum.

The Centre on Friday issued a series of guidelines that make payment of in hotels and restaurants absolutely voluntary. The establishments have to clearly mention this in invoice or bill. The guidelines will be sent to states for necessary action, food and consumer affairs minister said.

Hoteliers and owners, however, say unless the guidelines are made into a law, it cannot be enforced.

“We do mention the in our bills and invoices and if any customer does not want to pay it, he or she could look for other hotels. We don’t levy the for us -- around 30 per cent of this goes to the waiters and ancillary staff,” Joy Singh, owner of Raasta Restaurants, told this newspaper. 

The government guidelines say if any hotel or considers mere entry of a customer as consent to pay service charge, it is not correct. “Any restriction of entry based on this (service charge) amounts to a trade practice which imposes an unjustified cost on the customer, by way of forcing him or her to pay this charge as a condition precedent to placing order of food and beverages. As such, it falls under the restrictive trade practice,” the guidelines say. 

The norms, if implemented, will provide relief to customers who have to pay up to 20 per cent on food bills, in lieu of tips.

Paswan later told some reporters that he wasn’t giving legal backing to the change but the guideline would enable states to crack down. He said these had approval of the Prime Minister’s Office (PMO).

He said once you order a food item, you agree to pay price of product as mentioned in the menu, along with taxes; paying of any other charge is not right. The guidelines say the column on in a bill will be left blank for customers to fill before final payment.

The current consumer protection law does not empower the ministry to go for hefty fines and stringent action against violations. However, a new Bill under which an authority will be set up will have power to take action, an official explained.

Last week, Paswan had said the ministry had prepared an advisory on the issue and this had been sent to the PMO for approval.

A number of complaints from consumers have been received that hotels and restaurants were putting 'service charge' in the range of five to 20 per cent, in lieu of tips, the ministry had said earlier.

"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," said Dilip Datwani, president, Hotel and Association of Western India. "A customer patronises a food outlet with the full knowledge that he or she will be levied a It is not just hospitality; many businesses levy such charges. We cannot understand why we are being singled out."