Union Minister of Food and Public Distribution Ram Vilas Paswan on Friday announced that government has approved guidelines on Service Charge and that it would no longer be mandatory, but voluntary from now onwards.
“Govt has approved guidelines on Service Charge. Service Charge is totally voluntary and not mandatory now,” Paswan said.
Paswan added that customers themselves will decide the amount of Service Charge to be paid.
“Hotels/Restaurants should not decide how much Service Charge is to be paid by customer & should be left to discretion of customer. Guidelines are being sent to states for necessary action at their ends,” he said.
Earlier in January, Paswan had asked customers not to pay Service Charge terming it an ‘unfair practice’.
“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”, Paswan had said.