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Service charge only by those with collective agreements

The service charge essentially means that customers are being forced to pay for it.

Syndicated News
Written by Syndicated News

PUTRAJAYA — April 6, 2015: Effective today restaurants and hotels without a collective agreement between employers and employees are not allowed to impose the service charge.

Ministry of Domestic Trade, Cooperative and Consumerism (KPDNKK) secretary-general Datuk Seri Alias Ahmad said restaurants are required to
display a notice if they want to impose the charge.

The service provider must explain the reason for imposing the charge to the customer because the charge, which is an international practice, is
beyond any control and bound between the customer and service provider, he said.

“It is the right of a customer to decide not to pay the service charge and there is no prescribed rate,” he said in a press conference with Customs  concerning the Goods and Services Tax.

Alias said a working group has been formed, comprising KPDNKK, the Ministries of Finance and Human Resources and was working with the unions and associations of hotels to examine and review the issue.

“To date, there is no regulatory body or special ruling governing the collection of service charge. Thus the government is facing constraints in resolving the issue. Hence, I issued this directive today,” he said.

In the event of any breach of the directive, consumers are required to report to the KPDNKK. — Bernama

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