Update from Minister, Consumer Affairs

Shri Ram Vilas Paswan, Union Minister for Consumer Affairs, Food & Public Distribution told that in order to check the levying of Service Charge compulsorily, CBDT has been asked to consider inclusion of Service Charge while assessing tax. Similarly, directions have been issued to the officers of Legal Metrology of all States to monitor the cases of charging more than MRP.

In order to stop levying Service Charge compulsorily from consumers without their consent, guidelines were issued on 21st April 2017. A number of renowned hotels/restaurants have made Service Charge optional under the Guidelines. But still the complaints are being received in this regard.

To stop this unfair practice, hotels and restaurants have been asked either to leave the column of Service Charge blank or mention on the Bill that it is optional. It means that the consumer can pay the Service Charge if he or she wants.

In this regard State Governments were asked to issue directions to hotels and restaurants to display the message at an appropriate place that Service Charge is completely optional and if the consumer is not satisfied with the services of that hotel or restaurant, he or she is free not to pay Service Charge.

Similarly, guidelines have been issued in April 2017 against levy of Service Charge compulsorily and consider it as an unfair trade. In addition to it, all the States have been asked to implement these guidelines strictly and sensitize the consumers about the same through publicity. These guidelines were sent to Federation of Hotel and Restaurant Association of India (FHRAI), National Restaurant Association of India (NRAI) and Hotel Association of India (HAI) also.

Advertisements have also been released under ‘Jago Grahak Jago’ conveying the message among consumers that Service Charge is not mandatory but a tip which is fully a discretion of the consumer. Hotels or restaurants cannot compel the consumer to pay Service Charge. Similarly, Voluntary Consumer Organizations have also been asked to increase awareness and pick up some cases for exemplary remedial action. more  

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Consumers should be able to check his invoice. It is most likely that the purchase invoices of consumers can be altered and there may be cheating of consumers as regards GST rate as well as GST collected. If the facility of checking one's purchase is made available to the consumer then he may check and lodge the complaint. This will reduce the cheating by businessmen of both the consumers as well as Government. more  
Good. What to do if found that the organization has charged service charge? more  
This is what I would term as "a clear and definite statement on the subject" by a Minister of the Government of India. We kneed more and more of that on other topics as well. Having said that, after lunching at the La Piazza restaurant we received a bill which clearly included the item "service charge". On questioning, they immediately deducted the amount. Thereafter, I gave a tip to the waiter. And he said, even this will go into a common fund and shall be distributed after some time. Which, I find, is a good thing, because why should only the waiter who attends to you should pocket all the tip that he gets. There's an army of people working behind the scenes like e.g. in the kitchens, or the cleaners etc. who never get a penny in their hands from customers. A NEUTRAL SOLUTION THEREFORE COULD BE TO PLACE 'TIP BOXES' AT VARIOUS PLACES IN A RESTAURANT INTO WHICH PEOPLE COULD DEPOSIT THEIR TIPS, IF THEY WISHED TO. Our Club has taken this step on suggestions made by members, and also put notices even on the dining tables "not to tip any waiter"...... more  
Whole of this exercise seems to be futile. Concerned Ministry should amend their circular to say that the rates quoted in Menu card should include all taxes and charges including GST & service charge if any. If this simple exercise is done by ministry, the whole issue will get resolved. Thus Menu card will show MRP. more  
good one. this will end confusion and arguments. GST also say the same That MRP includes every thing. more  
THIS IS A VERY GOOD DECISION M.DAS more  
How could it be different when erstwhile Congress members have joined it. All government are the same. They loot the poor and middle class and give to the rich. more  
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