'Service Charge Does Not Exist, It is Being Wrongly Charged': Govt Issues Guidelines
Service charge on hotel and restaurant bills is "totally voluntary" and not mandatory, Food and Consumer Affairs Minister Ram Vilas Paswan said on Friday after the government approved guidelines on service charge.
New Delhi: Service charge on hotel and restaurant bills is "totally voluntary" and not mandatory, Food and Consumer Affairs Minister Ram Vilas Paswan said on Friday after the government approved guidelines on service charge.
Hotels and restaurants will not decide on service charge to be levied but it will be at a customer's discretion, the minister said, adding that these guidelines will be sent to states for necessary action.
"Hotels/restaurants should not decide how much service charge is to be paid by the customer and it should be left to the discretion of customer," he added.
"Guidelines are being sent to states for necessary action at their ends," the minister tweeted.
Hotels/Restaurants should not decide how much Service Charge is to be paid by the customer &it should be left to the discretion of customer.
— Ram Vilas Paswan (@irvpaswan) April 21, 2017
As per the guidelines, the column of service charge in a bill will be left blank to customers to fill up before making the final payment.
Hefty fines and stringent action against violation cannot be taken at present as the current Consumer Protection Law does not empower the ministry to do so, the official said.
However, the new Consumer Protection Bill under which an authority will be set up will have powers to take action, the official added.
Last week, Paswan had said that the ministry has prepared an advisory on the service charge issue and the same was sent to the PMO for approval.
"Service charge does not exist. It is being wrongly charged. We have prepared an advisory on this issue. We have sent it to the PMO for approval," Paswan had said.
A number of complaints from consumers have been received that hotels and restaurants were charging 'service charge' in the range of 5-20 percent, in lieu of tips, the ministry had said earlier.
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