The Domestic Trade, Cooperative and Consumerism Ministry will be issuing a service charge certificate to restaurants and hotels, as announced recently by Minister Datuk Seri Hasan Malek.
The certificate would be similar to the halal certificate so consumers would be informed about the specifics of the service charge imposed.
Consumers then can’t refuse to pay if they know (beforehand) the restaurant is charging a 10% service charge on top of the 6% GST.
The 10% service charge must be stipulated in the collective agreement (CA) between employers and employees before businesses can impose it. The employers decide on the amount of service charge imposed and it is a law of contract between these two parties. However, restaurants could also opt to charge less than 10%.
Restaurants which are still using handwritten bills while charging GST and service charge, will be given time until the end of the month to switch to machine-printed receipts.
According to the Malaysian Association of Hotels, the service charge was a universal practice and had been applied in Malaysia for decades without any problems.
Since 1975, the service tax was imposed by the Government through the legislation of Sales and Service Tax (SST) Act. Since then, the standard hotel practice is price plus 10% service charge and 5% Government tax. Subsequently, the Government tax was increased to 6%. Since April 1, the SST has been replaced with the GST.
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