Centre to issue advisory against restaurants adding service charge

Centre to issue advisory against restaurants adding service charge

New Delhi: The Centre on Friday said that it would soon issue an advisory against restaurants adding service charge to their bills.

Food and Consumer Affairs Minister Ram Vilas Paswan said that service charge does not exist. [Money] is wrongly charged as service charge. He said that they have prepared an advisory on this issue and have sent it to the Prime Minister’s Office for approval.

Once the draft advisory is approved by the Prime Minister’s Office, it will be issued in all states and Union Territories. Levying service charge without a customer’s consent will be considered an unfair trade practice under the Consumer Protection Act. Paswan clarified that the service charge was not a tax, but a tip.

In January this year, too, the Centre had said that payment of service charge was optional. It had equated service charge with tipping and said that consumers had discretion over the payment of service charges at restaurants and hotels. In a notification to state governments, the department had directed local administrations to advise hotels and restaurants to display information stating that service charges were voluntary. The statement had also said that consumers had the right to refrain from paying the charge if they were not satisfied with the service.



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