In 2010, restaurants in general were warned to stop imposing service charges of 10 per cent or face heavy fines. Image Credit: Pankaj Sharma/Gulf News Archives

Dubai: Restaurants in Dubai can impose a 10 per cent service charge on customers under certain conditions, an official has said.

Many customers are surprised to find a 10 per cent fee added to their bill as restaurants in general were in 2010 asked by authorities to stop charging the fee or face heavy fines.

Some restaurants had been charging customers five to 20 per cent extra on the bill as “service charges”.

According to the Consumer Protection Law No 26 for the year 2006, the practice is against the rules.

“I’ve noticed a 10 per cent extra charge sometimes. I didn’t pay attention to it as I thought it’s a way for restaurants to give some extra money to its staff, as not everyone gives tips. In the West, almost everyone tips around 10 per cent so I thought the fee here is a replacement for tipping,” said K.S., 36, a Pakistani customer.

However, if the restaurant is attached to a hotel or located in a special zone, it can still legally charge a 10 per cent fee.

Customers dining at such restaurants are sometimes taken aback when handed their bill as they are not aware of the details of the rules governing the extra charge.

The Department of Economic Development (DED), which overseas trade in Dubai, has again clarified the situation for customers.

In a statement to Gulf News, Mohammad Lootah, executive director, Commercial Compliance and Consumer Protection section, DED, said: “Service charge is illegal unless the restaurant in question is part of a hotel premises, in which case the applicable service charge is 10 per cent as per Dubai Municipality regulations.”

The confusion is sometimes compounded as one branch of the same restaurant — that is outside a hotel or special zone — may not charge the fee.

Some restaurants clarify the charges on their menus, stating upfront that a 10 per cent service will be imposed in line with rules of the hotel or special zone they are part of.

For instance, it is common to find restaurants in Dubai International Financial Centre (DIFC), a special free zone governed by its own laws, saying a 10 per cent “DIFC fee” will added to the bill.

DIFC is not governed by Dubai Municipality, which regulates the 10 per cent restaurant charges in hotels.

Other hotel restaurant menus or notices say prices are “inclusive of 10 per cent municipality fees”.