Service charge in restaurants is totally voluntary and not mandatory: Ram Vilas Paswan

Union Minister of Food and Public Distribution Ram Vilas Paswan on Friday announced that the government has approved guidelines on Service Charge.

"As per guidelines Service Charge is totally voluntary and not mandatory now. Hotels/Restaurants should not decide how much Service Charge is to be paid by the customer and it should be left to the discretion of customer," Paswan said.

Guidelines are being sent to states for necessary action at their end, the minister added.

The move comes amid heated spats breaking out between patrons and employees at pubs and eateries. Many experts felt that the government should clear the confusion by doing away with the service charge in order to avoid conflicts between hoteliers and customers.

Earlier in January, the Department of Consumer Affairs had asked state governments to advise hotels or restaurants to display information on their premises that 'service charges' are discretionary.

It 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."

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."