Service Charge Is Illegal in Chandigarh

On March 9 this year, the deputy commissioner of Chandigarh announced that service charge was illegal. He stated: ‘There will be no service charge on food bills that hotels and restaurants are levying on consumers as it is not backed by any statute.’ This is the second time the UT administration has passed such an order. In a communication on 31 October 2014, the excise and taxation department had instructed all hotels/ restaurants not to charge any service charge from customers, failing which necessary legal action would be taken against them. The Chandigarh Consumer Forum had then started imposing fine on restaurants found violating the order.