Service charge on food, drinks unfair trade practice: Paswan

Imposing service charge on food and drinks at hotels is an unfair trade practice and consumers need not pay it, Consumer Affairs Minister Ram Vilas Paswan said today.

Although there is no provision under the existing law to take action against hotels/restaurants, consumers have the freedom not to pay the service charge and can decide not to eat there if they are informed in advance about it through the menu card itself.

Paswan also mentioned that in future such cases would be addressed effectively as a provision has been made in the new Consumer Protection Bill to set up a regulator CCPA. The bill is likely to see the passage in the forthcoming budget session of Parliament.

Addressing the media on this issue, Paswan said: "Our Department's view is that imposing service charge is an unfair trade practice and consumers need not pay." There is no definition of 'service charge' in law but taking service charge without discretion of consumers is an "unfair trade practice", he said.

Paswan also said that consumers should be informed about service charge in the menu card itself and not in the bill.

"The price list in the menu card should reflect all inclusive costs including service charge," he said.

He also argued that there is no need to take service charge from consumers as price of each food item quoted in the menu card is arrived at after factoring in all expenses.

"In fact, hotels and restaurants should not charge even room service charge additionally," Paswan said.