Section of industry slam guidelines by Central Consumer Protection body
Hotels and restaurants can no longer impose service charge on customers. Amid rising consumer complaints, the Central Consumer Protection Authority (CCPA) on Monday issued guidelines for “preventing unfair trade practices and violation of consumer rights due to levying of service charge in hotels and restaurants.”
“No hotels or restaurants shall add service charge automatically or by default in the bill. No hotel or restaurant can force a consumer to pay service charges. They have to clearly inform the consumer that service charge is voluntary, optional and at consumer’s discretion,” the guidelines said.
Meanwhile, several restaurant and bar owners in Delhi on Monday opposed the CCPA guidelines barring them from levying service charges automatically or by default on food bills, saying it is “completely illegal and baseless”.
Restaurant owners asserted that service charge was not levied discreetly as it is mentioned on the menu and the bill as well.
In a statement, the Union Ministry of Consumer Affairs, Food and Public Distribution said, “The guidelines issued by the CCPA stipulate that hotels or restaurants shall not add service charge automatically or by default in the food bill. No collection of service charge shall be done by any other name.”
As per the guidelines, the consumers can ask the hotel or restaurant concerned to remove the service charge from the bill amount. “If any consumer finds that a hotel or restaurant is levying service charge in violation of the guidelines, a consumer may make a request to the hotel or restaurant to remove service charge from the bill amount,” the statement said.
Restaurants and hotels generally levy a service charge of 10 per cent on the food bill. The guidelines said there should not be any collection of service charge by any other name. “No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers,” the guideline said.
Further, service charge cannot be collected by adding it along with the food bill and levying GST on the total amount.
If any consumer finds that a hotel or restaurant is levying service charge in violation of the guidelines, s/he can request the concerned establishment to remove it from the bill amount.
The consumers can also lodge a complaint on the National Consumer Helpline (NCH), which works as an alternate dispute redressal mechanism at the pre-litigation level, by calling 1915 or through the NCH mobile app.
They can also file complaints with the Consumer Commission.
The complaint can be filed electronically through the e-daakhil portal for its speedy and effective redressal. Moreover, the consumer can submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings by the CCPA.
The complaint can also be sent to the CCPA by e-mail.
“Further, service charge is being levied in addition to the total price of the food items mentioned in the menu and applicable taxes, often in the guise of some other fee or charge,” it added.
The guidelines state that a component of service is inherent in the price of food and beverages offered by a restaurant or hotel. “Pricing of the product covers both the goods and services component. There is no restriction on hotels or restaurants to set the prices at which they want to offer food or beverages to consumers.
“Thus placing an order involves consent to pay the prices of food items displayed in the menu along with applicable taxes. Charging anything other than the said amount would amount to unfair trade practices under the (Consumer Protection) Act,” the guidelines said.
