States » NorthPosted at: Oct 28 2026 3:31PM


'Service charge voluntary; hotels, restaurants cannot make it mandatory'

Narnaul, Oct 28 (UNI) Hotels, restaurants and cafés cannot force customers to pay a Service Charge or collect it under another name, and consumers cannot be denied entry or service for refusing to pay it, an official spokesperson said on Wednesday, adding that strict action will be taken against establishments violating the prescribed guidelines.
Referring to a notice issued by the Secretary, Department of Consumer Affairs, Government of India, the spokesperson said the Narnaul district administration would take strict action against establishments violating the prescribed guidelines. The Deputy Commissioner has directed all Sub-Divisional Magistrates and the District Food and Supplies Controller to ensure compliance.
The spokesperson said the central government had highlighted instances in which some establishments continued to levy service charges despite the existing guidelines and court rulings.
Under the guidelines issued by the Central Consumer Protection Authority (CCPA) on July 4, 2022, hotels and restaurants cannot automatically add a service charge to customers’ bills or collect it under any other name. The charge must remain voluntary and optional, and consumers must be clearly informed that they are not obliged to pay it.
The spokesperson also clarified that establishments cannot add a service charge to the food bill and subsequently levy Goods and Services Tax (GST) on that amount.
Referring to the Delhi High Court’s March 28, 2025, judgment in National Restaurant Association of India versus union of India, the spokesperson said the court upheld the guidelines, recognising that service charge or a tip is a voluntary payment and cannot be made compulsory.
Collecting such charges under different names may also amount to an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019, the spokesperson said.
The prohibition extends to compulsory levies described as a staff welfare charge, an employee welfare charge, a service fee, a hospitality charge, or even a voluntary service charge. Changing the name of a mandatory levy does not make its collection permissible, the spokesperson added.
Consumers who encounter compulsory service charges have been urged to lodge complaints with the department concerned or the appropriate consumer forum.
UNI KK RSA
Tags: #'Service charge voluntary; hotels# restaurants cannot make it mandatory'
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