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Govt directive on service charge will lead to confusion, say restaurant owners

Union consumer affairs ministry on Tuesday said service charge on a food bill is not compulsory and a customer can choose to have it waived if not satisfied with the experience.

business Updated: Jan 03, 2017 01:06 IST
PTI
Union consumer affairs ministry said service charge on a food bill is not compulsory and a customer can choose to have it waived if not satisfied with the experience.
Union consumer affairs ministry said service charge on a food bill is not compulsory and a customer can choose to have it waived if not satisfied with the experience.(HT Photo)

The government’s clarification that service charge on food bill is not compulsory and a dissatisfied customer can choose to have it waived will “lead to confusion and quarrels”, hotels and restaurant owners said on Monday.

Federation of Hotel and Restaurant Associations Of India (FHRAI), the apex industry body, also said it will approach the consumer affairs ministry over the matter.

“It will lead to confusion and quarrels,” FHRAI chairman - Legal Matters Sub-Committee Pradeep Shetty told PTI when asked for comments on the government’s statement on service charge.

Union consumer affairs ministry on Tuesday said service charge on a food bill is not compulsory and a customer can choose to have it waived if not satisfied with the experience.

Read| Not satisfied with restaurant experience? Govt says you can refuse to pay service charge

The Centre has also asked states to ensure that hotels/ restaurants disseminate this information through displays in their premises.

Shetty said “service is an individual charge and FHRAI has already told its members that it should be prominently displayed”.

“We will approach the ministry on this,” he said.

National Restaurant Association of India (NRAI) President Riyaaz Amlani said: “As long as service charge is mentioned prominently in the menu, it cannot be termed as unfair or defective practice”.

Service charge is an above board practice and there are even judicial pronouncements to support that ‘service charge’ can be charged by hotels and restaurants, he added.

The ministry had stated that it had received a number of complaints from consumers that hotels and restaurants are following the practice of charging ‘service charge’ in the range of 5-20 per cent, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him.

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