There were number of complaints that hotels and restaurants are following the practice of charging “service charge” in the range of 5-20 per cent, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him.
Following the complaints the department of Consumer Affairs called for clarification from the Hotel Association of India, which have replied that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience he or she can have it waived off. Therefore, it is deemed to be accepted voluntarily.
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 government has once again clarified to the public that restaurants billing ‘service charges’ in addition to taxes is optional and the consumer has discretion to pay ‘service charge’ or not.