India bans service charge at hotels and restaurants

India’s government has banned hotels and restaurants from adding service charges to their bills by default without informing consumers.

The country’s consumer protection authority made the move after a concerning hike in complaints from customers being forced to pay the charge, BBC reported on Tuesday.

Restaurants often add a 5 per cent to 15 per cent tip to a customer's bill under a "service charge" category. Under the new rules, restaurants can no longer "add service charge by default or automatically" to the bill

The new guidelines also bar restaurants from collecting tips from customers "under any other name" or "deny service or entry to customers who refuse to pay a tip", BBC reports.

However, the government's consumer affairs department said that people could use their "discretion" on whether or not to leave a tip.