Published On : Tue, Jan 3rd, 2017

“If customers can’t pay service charge then they should not eat in hotels,” says NRAI


Representational Pic

Nagpur: With the Central Government making service charge on food bills not compulsory, the hotel associations reacted sharply by saying that if customers don’t want to pay service charges then they should not eat in restaurants at all.

The National Restaurants Association of India (NRAI) said that government says paying service tax at restaurants is discretionary and cannot be recovered without the consent of customers. “If customers don’t want to pay service charge then they should not eat food at hotels or restaurants.” The NRAI hinted at exploring legal ways in this regard.

The Consumers Affairs Ministry in a statement on Monday said, “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 per cent, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him or her. Service charge on a food bill is not compulsory and a customer can choose to have it waived if not satisfied with the experience”, the statement said. The Centre has also asked States to ensure that hotels/ restaurants disseminate this information through displays in their premises.

Reacting to the diktat, NRAI President Riyaz Amlani said, “We strictly follow Consumers Protection Act. The Act desists us from indulging in any unfair practice or confusing deals. How much service charge would be levied is clearly mentioned on menu cards in hotels or restaurants. We are not doing anything wrong. The amount of service charge is distributed among employees. You can ask customers if they want to pay service charge. If not, then they should eat food at such places where service charge is not levied,” Amlani said.

It may be recalled the Ministry had sought clarification from the Hotel Association of India, which replied that “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.” Highlighting provisions under the Consumer Protection Act, 1986, the Ministry said this law 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. A consumer can make a complaint to the appropriate consumer forum against such unfair trade practices.