Confederation of NCR RWAs, an apex resident body, wrote a letter to Prime Minister Narendra Modi and Ram Vilas Paswan, Minister of Consumer Affairs, Food and Public Distribution, requesting them to stop hotels and restaurants from collecting service charge from customers.
CONRWA's move came after hotel and restaurant owners opposed the ministry’s recent notification saying customers could not be compelled to pay service charge if they were dissatisfied with the quality of service.
In the letter, PS Jain, president of CONRWA, said that service charge had become a regular addition to a customer's bill, but paying it should not be mandatory. Restaurants were free to fix the rate of food they served but could not charge anything other than service tax of 5.6 per cent.
The letter stated that earlier, customers used to pay tips of their own accord based on the quality of the service, and that is how it should be.
CONRWA said that service charge could not be added to the customer's bill; neither could it be fixed, as it amounted to a sort of tip that depends on the customer’s satisfaction. Hence, they added, service charge should be cancelled altogether.
Restaurants and hotels collect 5 to 20 per cent on every bill as service charge.