'Hotels should ask customers before levying service charge'

NEW DELHI: Hotels and restaurants should ask customers before levying a discretionary service charge to bills, a senior government official said today.

Although service charge is voluntary, most hotels and restaurants levy up to 10 per cent of the bill amount as service charge, which is considered as tip. The service charge varies from place to place.

"Hotels and restaurants should add service charge to bills only after asking customers. Customers do not have to pay the service charge or tip if they do not like the service," Consumer Affairs Secretary Hem Pande said.

The Consumer Affairs Ministry will soon issue an advisory to all states asking them to take effective steps and remind consumers of their rights, he added.

Stating that "it is consumers' choice to pay service charge", Pande said they should force restaurants to clarify the discretionary service charges.

Restaurants charge 12.5 per cent VAT and 6 per cent service tax to the bills, apart from service charges.

The ministry is taking various initiatives to create awareness about consumer rights. It has also framed a new Consumer Protection Bill, under which stringent actions are proposed to curb misleading advertisements and adulteration.

It has also proposed provisions to check sale of fake products/services on e-commerce platforms.

The bill, which was introduced in Lok Sabha last year, is likely to see passage in the next session of Parliament.