Service charge is customer's discretion, not compulsory! Modi Govt sets norms against mandatory 'tips'

Worried about hefty bills after a meal at a restaurant? New government guidelines may release some of your burdens. The Modi government has set new norms which make service charge optional for the customers. 

According to new guidelines, the service charge is voluntary and not mandatory. 

"Hotels/Restaurants should not decide how much Service Charge is to be paid by the customer ⁢ should be left to the discretion of customer," Union Minister Ram Vilas Paswan tweeted on Friday.

Paswan also informed t\through twitter that the government has sent states necessary directions to implement the new guidelines. "Govt has approved guidelines on Service Charge. Service Charge is totally voluntary and not mandatory now. Guidelines are being sent to states for necessary action at their ends," he said in a series of tweets.

Currently, customers have to shell out somewhere between 10-20 per cent on their bill as service charge also known as tips for the staff.

Hefty fines and stringent action against violation cannot be taken at present as the current Consumer Protection Law does not empower the ministry to do so, the official said.

However, the new Consumer Protection Bill under which an authority will be set up will have powers to take action, the official added.Last week, Paswan had said that the ministry has prepared an advisory on the service charge issue and the same was sent to the PMO for approval.

“Service charge does not exist. It is being wrongly charged. We have prepared an advisory on this issue. We have sent it to the PMO for approval,” Paswan had said.

A number of complaints from consumers have been received that hotels and restaurants were charging ‘service charge’ in the range of 5-20 per cent, in lieu of tips, the ministry had said earlier. (With Inputs from PTI)

Government has approved guidelines on Service Charge.

— Ram Vilas Paswan (@irvpaswan) April 21, 2017

 

As per guidelines Service Charge is totally voluntary and not mandatory now.

— Ram Vilas Paswan (@irvpaswan) April 21, 2017

 

Hotels/Restaurants should not decide how much Service Charge is to be paid by the customer ⁢ should be left to the discretion of customer.

— Ram Vilas Paswan (@irvpaswan) April 21, 2017

 

Guidelines are being sent to states for necessary action at their ends.

— Ram Vilas Paswan (@irvpaswan) April 21, 2017