PSA: You can lawfully refuse to pay service charge at restaurants, hotels in this country

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PSA: You can lawfully refuse to pay service charge at restaurants, hotels in this country


Next time you’re not happy with your food in a restaurant or the drink at a pub in India, remember can wilfully refuse to pay the service charge. 

Addressing several complaints, the Indian government clarified today that restaurants cannot mandatorily add service charge — which ranges from five to 20 percent — to a customer’s bill. 

Most establishments add service charge directly to the bill in lieu of tips, providing customers with no recourse but to pay it irrespective of whether they enjoyed the service or not. On the other hand, many patrons often misinterpret the service charge for “service tax” that the government imposes and tip their server nevertheless. 

Staff across restaurants and pubs have often complained that the service charge never reached them and are often pocketed by the owners. 

In an advisory issued Monday, the Department of Consumer Affairs added that applying a service fee by default violates fair trade practices. 

Indians have long expressed their disapproval of restaurants charging them with a service fee in addition to a variety of taxes and cess the government imposes. With little awareness about the law, many didn’t know that the service fee was optional. 

The department has asked state governments to ensure that no company, hotel, or restaurant disregard the Consumer Protection Act, 1986. 

Additionally, hotels and restaurants will have to make customers aware of this policy on a display so that they can make an informed decision. 

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