Customers dissatisfied with service at any hotel or restaurant can opt to seek that service charge not be levied, as this is optional or discretionary as per the Consumer Protection Act, an official statement said on Monday.
The Department of Consumer Affairs, in a statement, also asked state governments to advise hotels and restaurants to disseminate information, such as through displays, that "the service charges are discretionary or voluntary".
The department said that it received complaints from consumers that many hotels and restaurants charged "service charge in the range of 5 - 20 per cent, in lieu of tips" and consumers were "forced to pay irrespective of the kind of service provided".
A clarification was sought from the Hotel Association of India, which replied that the "service charge is completely discretionary and should a customer be dissatisfied with the dining experience, they can have it waived off", as per the department.
The department have also asked the state governments to sensitise the companies, hotels and restaurants regarding provisions of the Act.