Service change discretionary, says top official

DELHI: Hotels and restaurants should ask customers before levying a discretionary service charge to bills, a senior government official said on December 13.

Although service charge is voluntary, most hotels and restaurants levy up to 10 per cent of the bill amount as service charge, which is considered as tip. The service charge varies from place to place, reports The Economic Times.

“Hotels and restaurants should add service charge to bills only after asking customers. Customers do not have to pay the service charge or tip if they do not like the service,” Consumer Affairs Secretary Hem Pande said.

The Consumer Affairs Ministry will soon issue an advisory to all states asking them to take effective steps and remind consumers of their rights, he added.

Stating that “it is consumers’ choice to pay service charge”, Pande said they should force restaurants to clarify the discretionary service charges.

Restaurants charge 12.5 per cent VAT and 6 per cent service tax to the bills, apart from service charges.


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