Restaurants, hotels bills set to be cheaper; govt says consumer has discretion on paying service charge

New Delhi: Hotel Association of India has clarified to the Department of Consumer Affairs that service charge paid by consumers in hotels and restaurants is optional and it is the consumers discretion whether he would like to pay the charge or not.

The Department of Consumer Affairs, on Monday said that Hotel Association of India, in a clarification said 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".

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.

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 and Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the 'service charges" are discretionary and voluntary and a consumer dissatisfied with the services can have it waived off.