Jago Grahak Jago

Jago Grahak Jago Logo

Hotels and Restaurants Cannot Add Service Charge to Food Bill: Consumer Protection Authority

Citing guidelines issued by the central consumer protection authority (CCPA), the ministry of consumer affairs says, no hotels or restaurants can add service charges automatically or by default to the food bill.

The guidelines, issued by CCPA, stipulate that hotels or restaurants shall not add service charges automatically or by default in the food bill and no collection of service charges shall be done by any other name. “No hotel or restaurant shall force a consumer to pay the service charge and shall clearly inform the consumer that service charge is voluntary, optional and at consumer’s discretion.”

“No restriction on entry or provision of services based on the collection of service charge shall be imposed on consumers. The service charge shall not be collected by adding it along with the food bill and levying GST on the total amount,” the CCPA says.

Consumers have registered many complaints in the national consumer helpline (NCH) about levying service charges. The issues consumers raise include restaurants making service charges compulsory and adding it in the bill by default, suppressing that paying such charges is optional and voluntary and embarrassing consumers if they resist paying the service charge.

Various cases relating to the levying of service charges have also been decided by consumer commissions in favour of consumers, holding them as an unfair trade practice and in violation of consumer rights.

After reviewing the complaints, CCPA decided to issue guidelines for preventing unfair trade practices and violation of consumer rights regarding levying service charges in hotels and restaurants.

It says, “If any consumer finds that a hotel or restaurant is levying service charge in violation to the guidelines, a consumer may make a request to the concerned hotel or restaurant to remove service charge from the bill amount. Also, the consumer may lodge a complaint on the NCH, which works as an alternate dispute redressal mechanism at the pre-litigation level by calling 1915 or through the NCH mobile app.”

“The consumer may also file a complaint against unfair trade practice with the Consumer Commission. The Complaint can also be filed electronically through e-daakhil portal www.e-daakhil.nic.in for its speedy and effective redressal. Furthermore, the consumer may submit a complaint to the district collector of the concerned district for investigation and subsequent proceeding by the CCPA. The complaint may also be sent to the CCPA by e-mail at com-ccpa@nic.in,” the release says.  Source: MoneyLife