In An Effort To Lighten The Consumers Burden, Government Removes Service Charge

We’ve all experienced that shocking moment when after calling for the bill we realize it’s far above what we had estimated. That’s mostly due to the multiple levels of taxes added on which we could never hope to account for while just looking at a menu. In what could be called a step to put an end to the confusion, the government today announced that restaurants can’t ask their customers to pay service charge anymore.

This move comes a couple of months after the state said in January that customers could choose not to pay service charges as it was not a mandatory. For the uninitiated, service charge could be defined as the tip. Not to be confused with the service tax.

Unfortunately, this statement had triggered turbulence with heated spats breaking out between patrons and employees at pubs and eateries. Many experts felt that the government should clear the confusion by doing away with the charge in order to avoid conflicts between hoteliers and customers.

It said: “A number of complaints from consumers have been received that hotels and restaurants are following the practice of 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 Ministry had sought clarification from the Hotel Association of India, which replied that “it 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.” I mean, obviously, it isn’t absolutely fair to just charge it as a standard rate especially if you’re displeased with the service. It goes without saying that you would tip a very small amount or not at all if you were unhappy with your meal.

In An Effort To Lighten The Consumers Burden, Government Removes Service Charge

Consumer Affairs Minister Ram Vilas Paswan had also expressed his displeasure over hotels’ practice of charging 5-20 per cent service charge.

He said: “Our Department’s view is that imposing the charge is an unfair trade practice and consumers need not pay. There is no definition of ‘service charge’ in law but taking service charge without discretion of consumers is an unfair trade practice.”

Paswan also said that consumers should be informed about service charge in the menu card itself and not in the bill. He also argued that there is no need to take service charge from consumers as the price of each food item quoted in the menu card is arrived at after factoring in all expenses.

This whole issue is problematic in the sense that we, in India, do have a problem with tipping. It doesn’t even cross our mind to tip the staff, hence it makes it easy for us to just pay a service charge which is included in the bill. On the other hand, is the service charge even going to the wait staff at the end of the day? I say, exclude the service charge, but let’s all adopt an attitude to tip, after all, it’s their livelihood.