Now, you can refuse to pay service charge at a restaurant if you are not happy with its service. The Department of Consumer Affairs in a statement released on Monday clarified that in cases where the customer is not satisfied with the service at hotels and restaurants, payment of service charge by the customer is "completely discretionary and should a customer be dissatisfied with the dining experience, he/she can have it waived off".
The government said a number of complaints have been received in this regard, where hotels and restaurants were 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/her. However, it added, the Consumer Protection Act, 1986 provides that a trade practice which 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 established under the Act against such unfair trade practices. In this context, the Department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which have replied that the 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," it said.
The Department of Consumer Affairs has asked the state governments to sensitize the companies, hotels and restaurants in the states regarding the provisions of the Consumer Protection Act, 1986 and also advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the 'service charges" are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.
Now let us break down the other charges you pay on your food bill.
Service tax
It is different from service charges mentioned above. This tax is levied by the government. This is 15 per cent currently and is payable on 40 per cent of your total bill in an air-conditioned restaurant only. In other words, service tax is 6 per cent of your total food bill (15 per cent of per cent of 40 per cent).
VAT (Value added tax)
VAT or value added tax is applicable on food items served in restaurants. VAT rates differ from state to state. VAT on alcoholic beverage is higher as compared to other items.
Now, you can refuse to pay service charge at a restaurant if you are not happy with its service. The Department of Consumer Affairs in a statement released on Monday clarified that in cases where the customer is not satisfied with the service at hotels and restaurants, payment of service charge by the customer is "completely discretionary and should a customer be dissatisfied with the dining experience, he/she can have it waived off".
The government said a number of complaints have been received in this regard, where hotels and restaurants were 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/her. However, it added, the Consumer Protection Act, 1986 provides that a trade practice which 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 established under the Act against such unfair trade practices. In this context, the Department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which have replied that the 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," it said.
The Department of Consumer Affairs has asked the state governments to sensitize the companies, hotels and restaurants in the states regarding the provisions of the Consumer Protection Act, 1986 and also advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the 'service charges" are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.
Now let us break down the other charges you pay on your food bill.
Service tax
It is different from service charges mentioned above. This tax is levied by the government. This is 15 per cent currently and is payable on 40 per cent of your total bill in an air-conditioned restaurant only. In other words, service tax is 6 per cent of your total food bill (15 per cent of per cent of 40 per cent).
VAT (Value added tax)
VAT or value added tax is applicable on food items served in restaurants. VAT rates differ from state to state. VAT on alcoholic beverage is higher as compared to other items.
Now, you can refuse to pay service charge at a restaurant if you are not happy with its service. The Department of Consumer Affairs in a statement released on Monday clarified that in cases where the customer is not satisfied with the service at hotels and restaurants, payment of service charge by the customer is "completely discretionary and should a customer be dissatisfied with the dining experience, he/she can have it waived off".
The government said a number of complaints have been received in this regard, where hotels and restaurants were 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/her. However, it added, the Consumer Protection Act, 1986 provides that a trade practice which 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 established under the Act against such unfair trade practices. In this context, the Department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which have replied that the 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," it said.
The Department of Consumer Affairs has asked the state governments to sensitize the companies, hotels and restaurants in the states regarding the provisions of the Consumer Protection Act, 1986 and also advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the 'service charges" are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.
Now let us break down the other charges you pay on your food bill.
Service tax
It is different from service charges mentioned above. This tax is levied by the government. This is 15 per cent currently and is payable on 40 per cent of your total bill in an air-conditioned restaurant only. In other words, service tax is 6 per cent of your total food bill (15 per cent of per cent of 40 per cent).
VAT (Value added tax)
VAT or value added tax is applicable on food items served in restaurants. VAT rates differ from state to state. VAT on alcoholic beverage is higher as compared to other items.
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