Service Tax

Restaurants billing service charges optional to pay by consumers who have discretion to pay such service charge or not-Press Release

Restaurants billing service charges optional to pay by consumers who have discretion to pay such service charge or not-Press Release

Restaurants billing ‘service charges’ in addition to taxes is optional: Department of Consumer Affairs

Consumer has discretion to pay ‘service charge’ or not: Department of Consumer Affairs

A number of complaints from consumers have been received that hotels and restaurants are following the practice of charging ‘service charge’ in the range of 5-20%, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him. The Consumer Protection Act, 1986 provides that a trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice and that a consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices. In this context, the department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which have replied that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience he/she can have it waived off. Therefore, it is deemed to be accepted voluntarily.

The Department of Consumer Affairs has asked the State Governments to sensitize the companies, hotels and restaurants in the states regarding aforementioned provisions of the Consumer Protection Act, 1986 and also to advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the ‘service charges” are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.

Share

Recent Posts

  • Income Tax

FAQs on Foreign Assets of Small Taxpayers Disclosure Scheme and Rule 2026

Frequently asked Questions on Foreign Assets of Small Taxpayers Disclosure Scheme and Rule 2026.  CBDT has released a FAQs on…

9 hours ago
  • Income Tax

Foreign Assets of Small Taxpayers- Disclosure Scheme Rules 2026 notified

Foreign Assets of Small Taxpayers- Disclosure Scheme Rules 2026 notified. Rule come into force on the 16th day of August,…

10 hours ago
  • GST

Order u/s 69 of the CGST Act has to be communicated before arrest of person concerned– SC

Order u/s 69 of the CGST Act authorising arrest of a person has to be communicated to him before arrest–…

3 days ago
  • Income Tax

Refund can not be denied on the ground that it was claimed in a return filed u/s 148 – ITAT

Refund can not be denied on the ground that it was claimed in a return filed u/s 148 where no…

4 days ago
  • Income Tax

Distinction between religious & charitable purposes is determined by institution’s primary or dominant object

The distinction between religious and charitable purposes is determined by institution's primary or dominant object and not merely by presence…

5 days ago
  • Income Tax

Fit case to issue notice u/s 148 – Relevancy of material & application of mind to objections important

For determination of what constitutes a fit case to issue notice u/s 148, rule of relevancy of the material and…

5 days ago