Restaurants Cannot Force Customers To Pay Service Charge, Says Ram Vilas Paswan

New Delhi: Restaurants cannot force customers to pay a service charge and customers have the right to decide if they should pay extra, the Centre has said in a fresh set of guidelines for state governments. Union Consumer Affairs Minister Ram Vilas Paswan said the guidelines, cleared by Prime Minister Narendra Modi's office, were being sent to state governments for enforcement.

Mr Paswan announced the Centre's move in a series of tweets on Thursday. "Service charge is totally voluntary and not mandatory now," the minister said. Hotels and Restaurants should not decide how much service charge is to be paid by the customer and it should be left to the discretion of customer," he said.

This is the second advisory to the states over the last four months to get them to reach out to hotels and restaurants and make sure they desist from adding a service charge to their customers' food bills. States would also be asked to make sure that restaurants put up a board at an appropriate place that makes it clear that "service charges" was a voluntary payment and consumers dissatisfied with the services can have it waived off.

But previous attempts to nudge the restaurants to give up the charge, that they insist goes to their staffers, have been unsuccessful. Since one of the arguments against the service charge was that restaurants could not levy a charge other than the published price on the menu, many restaurants put up notice at the entrance that declared customers would have to pay the additional 8-10 per cent service charge.