No more Service Charges levied by Hotels and Restaurants

News Highlights

The Central Consumer Protection Authority  (CCPA) issued guidelines to prevent unfair trade practices, and to protect the interest of consumers with regard to the levy of service charges in hotels and restaurants.

What do the Guidelines say?

• The CCPA has issued five major guidelines:
  1. No hotel or restaurant shall add service charge automatically or by default in the bill
  2. Service charge shall not collected from consumers by any other name
  3. No hotel or restaurant shall force a consumer to pay service charge and shall inform the consumer that service charge is voluntary and optional
  4. No restriction on entry or provision of services based on collection of service charge imposed
  5. Service charge shall not be collected by adding it to the food bill and levying GST on the total amount. 

Why were the Guidelines Issued?

• After a meeting of the Department of Consumer Affairs with Restaurant Associations and Consumer Organisation about service charge issue, the department announced that,
  • Centre would soon release a “robust framework” to ensure strict compliance of its 2017 guidelines that prohibited the levy of service charge.
• A day later, the Union Minister of Consumer Affairs said restaurants cannot ask customers to pay hidden charges.

Impact of Violation

• The consumer has four options at different levels of escalation.
  1. She can make a request to the hotel or restaurant to remove the service charge from her bill.
  2. She can lodge a complaint on the National Consumer Helpline (NCH) by calling 1915, or on the NCH mobile app.
  3. The consumer can complain to the Consumer Commission
  4. She can submit a complaint to the District Collector for investigation and subsequent proceedings by the Central Consumer Protection Authority  (CCPA) 
  5. A consumer can complain directly to the CCPA with an email to [email protected].

Pic Courtesy: freepik

Content Source – Indian Express