Customers dissatisfied with service at any hotel or restaurant can opt to seek that service charge not be levied, as this is optional or discretionary as per the Consumer Protection Act, an official statement said.
The Department of Consumer Affairs, in a statement, also asked state governments to advise hotels and restaurants to disseminate information, such as through displays, that "the service charges are discretionary or voluntary".
The department said that it received complaints from consumers that many hotels and restaurants charged "service charge in the range of 5-20 per cent, in lieu of tips" and consumers were "forced to pay irrespective of the kind of service provided".
A clarification was sought from the Hotel Association of India, which replied that the "service charge is completely discretionary and should a customer be dissatisfied with the dining experience, they can have it waived off", as per the department.
The department have also asked the state governments to sensitise the companies, hotels and restaurants regarding provisions of the Act.
Read the full statement below:
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 have 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 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/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the 'service charges" are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.
(With additional information from IANS)