Have You Checked Service Charge on Hotel’s Food Bill? Things You Must Know

service charge

Pay Service Charge if you are happy with the service

Any customer who is not satisfied with the services given by a hotel or restaurant can file a complaint against it. Whereas, it is an optional thing now to pay the service charge on hotel’s food bill. Necessary action will be taken by the Consumer Protection Council against the logged complaint.

The Department of Consumer Affairs has asked the state governments to sensitize companies, hotels and restaurants. It has advised the places to spread the information to customers through displays at appropriate places in their premises.

service charge
The Hotel Association of India has responded; clarifying that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience; he/she can have it waived off.

The Consumer Protection Act, 1986 is formed to protect the interest of end consumers. Currently, the Act wants to provide fair trade by promoting the sale, use or the supply of any goods or for the provision of any service. If any unfair method or deceptive practice is given to a customer; he/she can file a complaint to the appropriate consumer forum established under the Act against such unfair trade practices.

What is Service Tax?

 It is a tax which the service provider has to pay to the government but instead of paying from their own pocket, it is being collected from the end consumers. The tax is collected by the central government. Currently, the service tax is 15% which includes Krishi Kalyan Tax of 0.5% and Swachh Bharat Tax of .5%.

service tax

Service tax is implacable in the restaurant and one has to pay it, but make sure that you are paying tax only on your food bills.

What is Service Charge?

It is nothing but the tip given to a waiter. Currently, hotels and restaurants have started following the practice of charging ‘service charge’ in the range of 5-20%. Customers need to pay it forcefully.

What if the service charge is waived off?

Yes, Consumer Protection Act, 1986 has advised the restaurants to spread the information through a proper display at the appropriate place in the restaurants so that; it is visible stating that the service charges implied on the food bills are totally discretionary or free of charge and if the consumer is dissatisfied with the services given by the waiters of the restaurants, then the service charge needs to get waived off.

What are the other charges?

The other tax is VAT(value added tax) which varies from state to state and is charged on goods and services at various items. Restaurants and hotels do charge VAT on food and drinks which are being internally prepared.


However, VAT is not charged on the items which are not being made in the restaurant. For example, taking a Coca Cola bottle in a restaurant.

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