Ministry reaches out to PMO for clarity on service charge

NEW DELHI: The department of consumer affairs has sent an advisory to the Prime Minister's Office ( PMO) seeking clarity on service charge issue. This comes after the department’s circular in the beginning of this year which made service charge voluntary, depending on the consumer’s experience at a hotel or eatery.

“There is no such thing as service charge. If it is being charged by restaurants, it is wrong. An advisory has been issued in this regard and sent to PMO,” said Minister of Consumer Affairs, Food and Public Distribution Ram Vilas Paswan at a press briefing on Friday.

The department of consumer affairs had said earlier this year that service charge which is usually part of the bill at hotels and restaurants, was made ‘voluntary’, meaning the consumer could take a call on whether to pay service charge or not.

The decision created confusion in consumers and the hotel industry alike as the guidelines issued by the department were said to be unclear.

“Currently, it is only an advisory for states and the government is working on it. If it happens to become a law, it will be available in public domain,” said Madhulika Sukul, Additional Secretary, Department of Consumer Affairs.

The department of consumer affairs has constantly maintained that levying service charge is counted as an ‘unfair trade practice’.

The department has earlier asked state governments to sensitise hotels and restaurants and advise them to display at appropriate places on their premises that service charges are discretionary/voluntary and can be waived if a consumer is dissatisfied with the services.

“This is a government process, which is meant to take everybody on board from the government's end,” said a source in the know of the matter.