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Apr, 26 2017

​Karnataka Government directs hotels and restaurants to display 'No service charge' boards

Union consumer affairs minister Ram Vilas Paswan had 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 the law."

Karnataka government has directed the hotel and restaurant sector to display boards reading: 'No service charge will be collected here'.

U T Khader, Food and Civil Supplies Minister, said, "We will shortly convene a meeting of hotel industry representatives and apprise them about the Centre’s guidelines. The state government will come out with an order prohibiting hotels and restaurants from collecting service charge from customers."

The minister added that payment of service charge is left to the discretion of the customer.

Union consumer affairs minister Ram Vilas Paswan had 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 the law."

Endorsing Khader’s view, food and civil supplies secretary Harsh Gupta said, "Many hotels in Bengaluru and other cities have been taking customers for a ride by including service charge in the bill. Since there is no mention of service charge in the menu card and it is only mentioned in the final bill payable by the customer, it amounts to violation of fair trade practices."

However, Gupta said the state government does not have the power to take action against hotels and restaurants that continue to collect service charge.

He added, "Customers can approach consumer courts and get their grievances redressed."

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