Karnataka to carry out drive against service charge in hotels, restaurants1 min read . Updated: 25 Apr 2017, 10:25 PM IST
The proposal comes after union minister Ram Vilas Paswan said service charge on hotel and restaurant bills cannot be mandatory
Bengaluru: U.T. Khadar, Karnataka’s food, civil supplies and consumer affairs minister, on Tuesday said that the department will undertake a drive over the next few days against hotels levying service charge to its customers.
Khadar said that hotels charge anywhere between 6-8% service charge and that all district administrations will be given orders to keep a check on hotels that do levy these charges and take actions against those violating government orders.
The proposal to undertake such a drive comes days after the union minister for food, civil supplies and consumer affairs Ram Vilas Paswan raised the issue of service charge on hotel and restaurant bills being voluntary and not mandatory.
“The government has approved guidelines on service charge. As per the guidelines, service charge is totally voluntary and not mandatory now," Paswan said in a tweet on Saturday. On 23 April, the minister had said sought the details of how restaurants and hotels used service charges collected from customers.
“Collecting of service charge does not impact our business in any manner. The money is collected and distributed not only among waiters, but with cooks and utilities staff as well. It would encourage them to ensure quality of service and food is maintained," Madhukar Shetty, secretary of the Karnataka hotels association told Mint on Tuesday.
However, he said that of the nearly 80,000 hotels under its umbrella organisation, there are only 10-20% of hotels that levy service charge. He classified fine dining restaurants, star hotels and pubs among a few other categories that levy service charges to its customers.
As per the guidelines, the column of service charge in a bill will be left blank and it will be up to the customer to fill up the blank before making the final payment. “If there is mandatory levy of service charge, customers can file a complaint in the consumer court," PTI quoted a a senior consumer affairs ministry official as saying.
Shetty said that the association will not challenge the guidelines for the sake of the customer. He said that customers will tip the staff if they are happy with the service.
Shetty also said that the government cannot ask hotels to discontinue this practice as there is no provision under existing laws. However, he said that the hotels will let the customer decide if they want us to apply this tax.