With the effects of demonetisation still being experienced in the country, the New Year came with what seems to be good news. The hangover from the celebrations was still strong when The Department of Consumer Affairs came up with an announcement that the ‘service charge’, which restaurants include in addition to taxes, is actually optional and not mandatory.
A press release published by the Ministry of Consumer Affairs, Food and Public Distribution, through the Press Information Bureau under the title ‘Consumer has discretion to pay ‘service charge’ or not: Department of Cons umer Affairs’, has stated that – “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 has 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 Kochi Post contacted certain authorities, restaurant owners of various restaurants, and the customers to know their views.