The Government in April 2017 issued guidelines on fair trade practices related to charging of Service Charge from consumer by hotel/restaurants. As per these guidelines, Service Charge is optional and payment of it depends entirely upon the discretion of the consumers.

This Ministry vide Circular dated 21.04.2017 had advised the State Governments to sensitize the companies, hotels and restaurants in the state regarding provisions related to unfair trade practices of the Consumer Protection Act and to disseminate the information through the display at the appropriate place in the hotels/restaurants that the ‘service charges” are discretionary/ voluntarily and a consumer dissatisfied with the services can have it waived off.

During the year 2020, 81 complaints related to levying of Service Charge by restaurants, pubs and hotel have been received at National Consumer Helpline. All the complaints were taken up with the respective Hotels/ Restaurants for appropriate redressal.  The response received from the Hotels/Restaurants was thereafter conveyed to the complainants.  

The Consumer Protection Act, 2019 provides for three-tier quasi-judicial machinery called Consumer Commissions at the Central, State and District levels and the consumers can approach District Commissions for redressal of grievance related to the collection of service charges by hotels and restaurants.

This information was given in a written reply by the Union Minister of State for Consumer Affairs, Food and Public Distribution, Danve Raosaheb Dadarao in Lok Sabha today.