Is it mandatory or voluntary to pay the service charge?

Many restaurants and hotels charge service charges for their services and customers have to pay voluntarily or involuntarily. Most people pay these extra charges when they are happy and satisfied with the service given by restaurants and hotels. But what if a customer is not happy with the services? Is it mandatory or voluntary to pay the service charge?

In April 2017 Ministry of Consumer Affairs, food and public distribution issued guidelines on Fair Trade Practices regarding service charges. Minister of Food and Consumer Affairs, Ram Villas Paswan, made it clear that it is voluntary and not mandatory to pay service charges. But in response to this Riyaaz Amlani, president of the National Restaurant Association of India, said that “Guidelines are not laws. The statement of Minister Paswan is causing unnecessary confusion among the public. Restaurants are not violating any laws by applying service charges”[ii]. Guidelines also have mentioned that consumers can move to Consumer Forum regarding this. Still, there is no definite law or legislation dealing with this sphere, so the confusion is still prevalent.

Provisions of Service Charge

Under Section 2(47) in the Consumer Protection Act, 2019 “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.”

Still, there is no clear law about service charges. If a service charge is added to the pricing of food or anything that you have ordered then it becomes difficult to refuse. But you can refuse to pay service charges if the food or service given by the restaurant is not proper or has any deficiency in that.