Pay Service Charge At A Restaurant Only If You Are Satisfied

Tables are set at Sattvik restaurant at Select CityWalk Mall in New Delhi, India (Photograph: Sanjit Das/Bloomberg News)

Customers need not pay the service charge added to their food or hotel bill, if they are not satisfied with the service staff, according to a notification issued by India's Department of Consumer Affairs.

All such establishments will also need to display the same on their premises.

The government in its notification said it had consulted the Hotel Association of India after a number of customers filed complaints that “hotels and restaurants are charging service charge in the range of 5-20 percent in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him”.

The association had, in its response, made it clear that paying service charge is completely at the discretion of the customer, and it can be waived off if the customer was dissatisfied with the service.

The Consumer Protection Act, 1986 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 and that a consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices.

Consumer Affairs Ministry Notification

Restaurants Have No Choice

Speciality Restaurants Ltd., a hospitality chain which runs popular outlets like Mainland China and Oh Calcutta!, said it has no option but to abide by the government's order. Chief Financial Officer Rajesh Mohta told BloombergQuint in an email that while a 10 percent service charge is currently added to the bill, the “customer has the discretion to pay it or not”.

Karan Dharod, co-owner of Light House Cafe, which runs two gastro-pubs in Mumbai, said the customer has the option to ask for the service charge to be waived off if he or she is not satisfied with the service provided at the restaurant.

For now we will continue to charge a service charge. However, the customer has the right to object to it before asking for the bill. However, there needs to be some more clarity on this issue from the government.

Karan Dharod, Co-Owner, Light House Cafe

Anuj Solanki, owner of Elephant & Co. in Pune, had a similar view. The 7 percent service charge that's levied on the bill will be waived off if the customer is not happy, he said.