Service Charge
Also called: restaurant service charge
What is Service Charge?
Service charge is an amount a restaurant adds to the bill for service, distinct from a government tax and from a voluntary tip. In India, consumer protection guidance has been clear that it cannot be added compulsorily or collected as if it were a tax.
Why Service Charge matters
Service charge disputes are a common source of complaints and negative reviews. Presenting it as mandatory, or blending it into the taxable line, invites both consumer complaints and tax questions.
How Service Charge works in practice
If you levy it, disclose it clearly before ordering, keep it removable on request, and show it as a separate line rather than folded into the food total. How the collected amount is distributed to staff should also be documented.
Frequently asked questions
No. Guidance is explicit that it cannot be added compulsorily, and customers may ask for it to be removed.