The Centre reiterated on Monday that customers dissatisfied with service could choose not to pay the service charge levied by a hotel or restaurant, but the National Restaurant Association of India (NRAI) cited judicial precedent to support its case for the levying of a service charge. It also issued a statement implying that customers were free not to eat at a restaurant if they did not wish to pay the service charge levied by it.
The Government had clarified earlier in Parliament that the authorities could act against those levying a service charge without the knowledge and consent of consumers on charges of indulging in "unfair trade practices". NRAI, which represents independent restaurants and chains, said levying service charge was a "common and accepted practice" that was "recognised as such" by various Government departments.
A statement issued on Monday by the Union consumer affairs ministry said it had asked states to ensure hotels and restaurants displayed information that service charge was optional on their premises. The ministry said this was being done as it had received many complaints from customers who said they were being forced to pay service charge, in lieu of tips, of anything between 5% and 20% "irrespective of the kind of service provided".