Kathmandu, January 29

There is something to cheer for diners as restaurants and bars in the country will not levy 10 per cent service charge in their bills starting today.

Following pressure and criticism from customers, the Restaurant and Bar Association of Nepal (REBAN) has decided to scrap 10 per cent service charge that is being levied by eateries.

Currently, customers are obliged to pay additional 23 per cent charge for what they eat in restaurants and other eateries —13 per cent value added tax (VAT) and 10 per cent service charge. Scrapping the 10 per cent service charge means that diners will now have some financial relief at restaurants.

Pramod Kumar Jaiswal, president of REBAN, said that the service charge provision has been scrapped keeping in view the financial pressure at eateries for the customers. “We expect that this decision will not only benefit customers but will also help the restaurant business to grow further,” he said.

Moreover, this decision will also help the growth of tourism in the country, basically among primary tourist destinations like Kathmandu, Pokhara and Sauraha, among others, opined REBAN officials.

The long-standing dispute regarding service charge between hoteliers and trade unions of hotel and restaurant workers had been sorted out in June last year with a revision in the ‘sharing structure’ of the 10 per cent service charge being levied on customers.

The new sharing structure of the 10 per cent service charge had not only increased workers’ share but has also made the three trade unions its shareholders. As per the new service charge sharing structure, workers had been getting 72 per cent of the 10 per cent service charge and the three trade unions had been getting one per cent each. Of the remaining 25 per cent, hoteliers had been getting 23 per cent of the service charge while Hotel Association Nepal had been getting two per cent.

Meanwhile, trade unions are against this decision of REBAN to cancel the 10 per cent service charge citing that the decision was made without consulting the trade unions.