The Central Government has issued a strong warning to restaurants against adding mandatory service charges to customer bills. Union Consumer Affairs Minister Prahlad Joshi said establishments that continue to levy such charges despite existing guidelines could face strict action, including financial penalties and damage to their reputation.

The move is aimed at protecting consumer rights and ensuring customers are not forced to pay additional charges without their consent.

Mandatory Service Charges Under the Scanner

According to the minister, adding a compulsory service charge to restaurant bills is an unfair business practice. He urged restaurants to immediately stop automatically including these charges and, if necessary, update their billing systems to ensure such fees are not added by default.

He also shared that the issue has become increasingly common in major cities, with many customers finding service charges added to their bills without prior approval.

Action Against Restaurants

Consumer authorities have already initiated action against several restaurants across the country over complaints related to mandatory service charges.

In one case, a restaurant chain was directed to refund the service charge collected from a customer and was also fined for violating consumer protection norms. Similar directions have reportedly been issued to several other restaurants following complaints from consumers.

What Customers Should Know

A key point highlighted by the government is the difference between a tip and a service charge.

• Tip: A voluntary amount that a customer chooses to pay for good service.
• Service Charge: A fee automatically added to the bill by the restaurant.

Customers are free to leave a tip if they wish, but they cannot be compelled to pay a mandatory service charge simply because it appears on the bill.

What to Do If You're Charged a Service Fee

If a restaurant adds a mandatory service charge to your bill and refuses to remove it, you can:

• Ask the restaurant staff to remove the charge before making the payment.
• Keep a copy of the bill as proof.
• File a complaint through the National Consumer Helpline or the appropriate consumer grievance platform if the issue is not resolved.

The Bottom Line

The government has made it clear that restaurants should not impose mandatory service charges on customers. Businesses that continue the practice despite consumer protection guidelines may face regulatory action. Customers should remember that tipping is a personal choice, not a compulsory payment, and they have the right to question or challenge any mandatory service charge added to their bill.