The government acted following a number of complaints from consumers after hotels and restaurants were following the practice of charging 'service charge' in the range of 5-20 percent

The government on Monday issued a statement clarifying that hotels, restaurants and companies cannot include 'service charges' as part of various taxes that is included in the final bill to consumers.

In fact, the statement says that consumers should have the option to either pay or not to pay the service charge.

The government acted following a number of complaints from consumers after hotels and restaurants were following the practice of charging 'service charge' in the range of 5-20 percent, in lieu of tip, the statement said.

"In this context, the department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which have replied that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience he/she can have it waived off. Therefore, it is deemed to be accepted voluntarily," the government release said.

The Department of Consumer Affairs has asked the state governments to sensitize the companies, hotels and restaurants in the states regarding aforementioned provisions of the Consumer Protection Act, 1986 and also to advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the 'service charges" are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off, the release added.