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Service Charge in Hotel Bill? No Need to Pay, Says Govt

The Department of Consumer Affairs has finally woken up to the consumer needs that it has asked the state governments to implement one of the most violated and not followed Act in the country – the Consumer Protection Act, 1986. The Act clearly leaves the option of paying tip or service charge to the customer to pay or not.

In reality, all hotels and restaurants, including the MNC brands like KFC and McDonald 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 violation of the provision of any service by a service provider or adoption of 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.

The 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 problem in India is that many customers do not fight after the dinner is provided and the bill is served with service tax included. Why not the Department of Consumer Affairs ask the hotel and restaurant owners not to make Service Charge part of the bill but make it voluntary or provide a box next to the cashier to be put in?

For now, the Department of Consumer Affairs has merely asked the State Governments to advise the Hotels/Restaurants to display this information at the appropriate place in the hotels/restaurants. Will anybody follow it? The Department should know that this is not practical in India.

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