Diners can move to consumer court over service charge: Paswan

Paswan hints hands were tied to act against errant hotels

The Centre on Sunday said it expected restaurants to keep an account of the payments made to its staff from the money that they collect by levying service charge from diners.

“When restaurants take service charge, they claim to give a portion of it to the service staff. This should be accounted,” Consumer Affairs Minister Ramvilas Paswan told reporters.

He was reacting to reports that some restaurants had insisted that the service charge they levied was perfectly legal under the Consumer Protection Act, 1986.

Paswan also dropped hints that his hands were tied when it came to taking action against errant restaurants, which continue with the “unfair trade practice” of levying service charge on customers.

Guidelines
On Friday, the Centre had issued guidelines to restaurants, making it clear that service charge was totally voluntary and should not be forced on customers.

Paswan said if restaurants continued to levy service charge, customers can move the consumer court to seek redressal.

“The guidelines issued by the Centre could come in handy during consumer court proceedings,” a consumer ministry official said.

Tips voluntary
As per the new guidelines, service charge is not to be incorporated in hotel and restaurant bills.
In fact, the government had suggested that the column of service charge be left blank for restaurant customers to fill up before making the final payment.