Service Charge Is Not Mandatory

In 2014, the finance ministry had clarified that the ‘service charges’ that some restaurants levied on customers did not come to the government coffers. “Some restaurants/hotels/eateries besides charging for the food and beverages are also charging ‘ service charges’ in their bills. The proceeds of the ‘service charges’ are retained by the restaurants/hotels/eateries,’ the finance ministry had said in a note. Some consumers have a ‘misapprehension’ that these ‘service charges’ are being collected by the restaurant on behalf of the government as tax, which however is not the case.