Department of Consumer Affairs clarified that Consumer has discretion to pay ‘service charge’ or not

Whenever you go to a posh restaurant or Eatery at AIR PORTS, the chances of paying a hefty fee are more. In addition to this there is the SERVICE CHARGE element. Though this can only be charged in an Air conditioned hotel and that too only for 80^% of the total bill, the reality is different. Charging service charge, in SERVE YOUR SELF centres, is therefore against the principle.CDR fora, have come down upon eateries charging un due service charges.

A number of complaints from consumers have been received that hotels and restaurants are following the practice of charging ‘service charge’ in the range of 5-20%, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him. 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. In this context, the department of Consumer Affairs, Central Government has 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/she can have it waived off. Therefore, it is deemed to be accepted voluntarily.

The Department of Consumer Affairs has asked the State Governments to sensitize the companies, hotels and restaurants in the states regarding aforementioned provisions of the Consumer Protection Act, 1986 and also to advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the ‘service charges” are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.


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