Diners can refuse to pay service charge

You are free to walk away without paying the service charge added to your restaurant bill, the Centre said on Monday.

Service charge is collected in lieu of tips, and many restaurants routinely add it to the bill. Customers not aware of its discretionary nature end up paying a tip over and above the charge, in effect tipping the restaurant twice over.

Many consumers had petitioned the government, saying restaurants make the charge seem mandatory. “Restaurants are billing service charge in addition to taxes. Service charge is optional. Consumer has a discretion to pay or not,” Consumer Affairs Minister Ramvilas Paswan said here.

The Centre has shot off letters to state governments to ask hotels and restaurants to put up display boards, informing customers that they have the right to decline the charge.

The consumer affairs ministry had received complaints about restaurants levying ‘service charge’ in the range of 5% to 20%, in addition to taxes.

The ministry had sought a response from the Hotel Association of India, which replied the charge was completely discretionary and “should a customer be dissatisfied with the dining experience, he can have it waived off.”