The government stated on Monday that any consumer may decide to refuse to pay the service charge
levied by a hotel or restaurant.
This is a regrettable pronouncement on a justified practice, stated a leading hotels
Many restaurants and hotels
levy a service charge
of 5-20 per cent, usually seen as a replacement for tips. This is apart from the service tax charged from the customers.
The Centre has told states to ensure that hotels
and restaurants disseminate the information that their service charges are discretionary and voluntary, and consumers
dissatisfied with the service can refuse to pay them.
The National Hotel Owners Association of India stated, later in the day, that inclusion of a service charge
in a restaurant bill is a widely accepted practice, recognised by various state governments and the Centre, and reinforced through judicial pronouncements.
Also, that the levy is a matter of policy for an eatery, which should display it. Thereafter, it is for the consumer to decide if he or she wishes to avail of the facility offered at the place, the body said.
The Association's statement did not mention the Centre's direction. In an earlier statement, the Department of Consumer Affairs
(DCA) had said that it had received a number of complaints regarding hotels
and restaurants levying a compulsory service charge
which the consumers were forced to pay, irrespective of the type of service provided.
The statement added that the department had sought a clarification from the Hotel Association of India. In fact, it said, the Association had agreed that a service charge
was completely discretionary and should a customer be dissatisfied with the dining experience, he or she can have it waived.
Highlighting provisions under the Consumer Protection Act, the government said a trade practice which, for the purpose of promoting the sale, use or supply of any goods or service, adopts any unfair method or deceptive practice is to be treated as an unfair trade practice.
The government further noted that a consumer can make a complaint to the appropriate consumer forum against such practices.