Government notification states – Payment of service charge at restaurants and hotels is not mandatory

Posted on by Ankita Sharma

Service Charge at Restaurants/Hotels: In a recent statement, the government has said that it is not mandatory to pay the service charge at hotels and restaurants from now on. It would be the discretion of the customer whether to pay the service charge or not.

Government notification states - Payment of service charge at restaurants and hotels is not mandatory

The Department of Consumer Affairs has also directed the hotels and restaurants to update the information on their premises to let the consumer know about the recent amendment.

Service Charge at Restaurants/Hotels discretionary

The decision comes after the numerous complaints have been submitted regarding the mandatory service charge that generally ranges between 5 to 20 percent of the total bill amount. The ‘service charge’ has been a topic of perpetual debate.

Restaurants are not happy with the decision of the government. The National Restaurant Association of India (NRAI) states in its guidelines that the restaurants and the hotels should disclose about the levy of service charge beforehand to its customers.

NRAI had earlier said that the inclusion of the service charge in the total bill amount is common practice and is acceptable as well.

Riyaaz Amlani, president, NRAI said, “Information regarding the amount of service charge is to be clearly mentioned/displayed by restaurants on their menu cards…so that customers are well aware of this charge before availing the services and can use their discretion of not using the facility offered by the restaurant.”

Government notification states - Payment of service charge at restaurants and hotels is not mandatory

“There are some restaurants that don’t charge anything at all, there are others who will charge anything up to 10 per cent. There could be a few charging more than 10 percent too. Any guest walking into the restaurant is informed (about levy of service charge) through the menu and other display material inside the premises”, Rajeev Matta, chief executive officer, Sanjeev Kapoor Restaurants (SKR) Pvt Ltd said.

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