The Government has prohibited the hotels and restaurants from billing 'Services Charges' on customers.
Following directions by the Minister for Food, Civil Supplies & Consumer Affairs, Choudhary Zulfkar Ali, the Department of Food, Civil Supplies & Consumer Affairs has issued Circular No: 02 – FCSCA of 2017 whereby 'Service Charges' billed by the hotels and restaurants have been prohibited.
"It has time and again been brought into the notice of Department and even highlighted in the media that the Hotels and Restaurants are following practice of charging Service Charges in the range of 5% to 20% in lieu of tips and consumers are forced to pay this charge irrespective of the services provided to them," reads the Circular issued by FCS&CA Department.
As per the circular the customers are also required to pay service tax on this service charge billed by the Hotels and Restaurants.
Terming it unfair trade practices in terms of Consumer Protection Act 1986, the Department through the circular has impressed upon the owners of Hotels, Restaurants and Dhabhas operating in the state to give up the practice of billing Service Charges forthwith and warned them that anybody found defaulting in this regard will be liable to legal action warranted under rules.
The Department has further impressed upon the concerned officers and field functionaries Food, Civil Supplies and Consumer Affairs Department and Department of Legal Metrology to check and ensure that such charges from the consumers are not charged anymore henceforth.
Expressing concern over charging of Service Charge, Minister for Food, Civil Supplies & Consumer Affairs Choudhary Zulfkar Ali said that the Department won't allow anybody to bill undue charges from the consumers and such acts will be taken very seriously.