Are You Still Paying Extra? Restaurants, Hotels Can't Charge Service Charge From You: Know More

Have you spotted those sly 'service charge compulsory' notices in restaurants? Are you paying extra for your restaurant bill? If you are still paying the service charge, then yes!

The Indian government has banned hotels and restaurants from levying service charges as part of the food bill. The consumer protection authority issued the order after authorities said there had been increased complaints by customers being forced to pay the charge.

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What is the new rule?

Restaurants often add a 5% to 15% tip to a customer's bill under a "service charge" category.But new rules say restaurants can no longer "add service charge by default or automatically" to the bill.

The new guidelines also bar restaurants from collecting tips from customers "under any other name" or "deny service or entry to customers who refuse to pay a tip."

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Can customers now refuse it?

Now, the latest guidelines are clear and give consumers the right to lodge a complaint on the National Consumer Helpline (NCH) against any service fee charged. Consumers can also submit a complaint electronically through the e-daakhil portal for quick and efficient resolution.? ?

What had NRAI said earlier?

While there was some confusion previously when the Consumer Affairs Ministry had asked restaurants and hotels not to levy a service charge, there were no clear guidelines, and the National Restaurant Association of India (NRAI) had argued that a charge for services was "legal" until the government formed a legal framework.

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In 2017, the government's consumer affairs department issued a set of guidelines saying that customers only had to pay the prices displayed on the menu card along with government taxes.

The department said people could use their "discretion" on whether or not to leave a tip and that extra charges without the customer's consent amounted "to unfair trade practice." Instead, the government encouraged restaurants to pay fair wages to their employees and increase product prices to meet the cost.

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