The government stated that in cases wherever the customer isn’t happy with the service at hotels and restaurants, payment of service charge by the customer is “completely discretionary”.
Now, you’ll be able to refuse to pay service charge at a restaurant if you’re not pleased with its service. The Department of Consumer Affairs in a very statement released on Monday stated that “in cases where the customer isn’t happy with the service at hotels and restaurants, payment of service charge by the client is “completely discretionary” and if a customer be unhappy with the eating experience, he/she can have it waived off”.
The government mentioned that variety of complaints are received in this regard, where hotels and restaurants were charging service charge within the range of 5-20 per cent, in place of tips, which a consumer is forced to pay no matter the type of service provided to him/her. Also, they mentioned that, the Consumer Protection Act, 1986 provides that a trade practice that adopts any unfair methodology or deceptive practice is to be treated as an unfair trade practice.
In this context, the Department of Consumer Affairs, Central Government has demanded clarification from the Hotel Association of India, which have replied that the service charge is totally discretionary and will a customer be unhappy with the eating experience he/she will have it waived off. Therefore, it’s deemed to be accepted voluntarily,” it said.
The State Governments has been asked by Department of Consumer Affairs to sensitize the companies, hotels and restaurants within the states regarding the provisions of the Consumer Protection Act, 1986 and conjointly advise the Hotels/Restaurants to disperse info through display at the suitable place within the hotels/restaurants that the ‘service charges” are discretionary/ voluntary and a consumer dissatisfied with the services will have it waived off.
Now allow us to break down the other charges you pay on your food bill.
It is completely different from service charges mentioned above. This tax is levied by the govt. this is often 15 per cent presently ANd is collectable on 40 per cent of your total bill in an air-conditioned eating place solely. In other words, 15 per cent of per cent of 40 per cent i.e service tax is 6 per cent of your total food bill.
VAT (Value added tax)
VAT or value added tax is applicable on food things served in restaurants. VAT rates vary from state to state. VAT on beverage is higher as compared to alternative things.