 "Restaurants can't force you to pay service charge: Dept of Consumer Affairs")
It is a practice restaurants use to extract the tip from you after you're through with the dining. Many have been known to add a 'service charge' in the range of 5-20 per cent, over and above the price of the meal and taxes.
However, there has a surge of complaints from consumers that they are being forced to pay this component, irrespective of the quality of service provided.
The Department of Consumer Affairs (DCA) has now addressed this grievance with a clarification issued on Monday, which states that service charge is a voluntary payment that a patron can refuse to shell out in case he feels the service provided to him is not up to the mark.
In a press note issued today, the DCA says that it had called for a clarification from the Hotel Association of India on this issue. In its response, the association confirmed that payment of service charge is completely discretionary and should a customer be dissatisfied with the dining experience he can have it waived off. In other words, this component is deemed to be accepted voluntarily.
The DCA further states in its note: "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."
The DCA has also asked the State Governments to sensitise companies, hotels and restaurants in their jurisdiction about these provisions of the Consumer Protection Act, 1986. Eateries are also required have appropriate displays within their premises informing customers that 'service charges" are discretionary/ voluntary and that a consumer dissatisfied with the services can have it waived off.
However, there has a surge of complaints from consumers that they are being forced to pay this component, irrespective of the quality of service provided.
The Department of Consumer Affairs (DCA) has now addressed this grievance with a clarification issued on Monday, which states that service charge is a voluntary payment that a patron can refuse to shell out in case he feels the service provided to him is not up to the mark.
In a press note issued today, the DCA says that it had called for a clarification from the Hotel Association of India on this issue. In its response, the association confirmed that payment of service charge is completely discretionary and should a customer be dissatisfied with the dining experience he can have it waived off. In other words, this component is deemed to be accepted voluntarily.
The DCA further states in its note: "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."
The DCA has also asked the State Governments to sensitise companies, hotels and restaurants in their jurisdiction about these provisions of the Consumer Protection Act, 1986. Eateries are also required have appropriate displays within their premises informing customers that 'service charges" are discretionary/ voluntary and that a consumer dissatisfied with the services can have it waived off.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%