The Central Consumer Protection Authority (CCPA), on Monday, July 4th, prohibited hotels and restaurants from charging service charges and allowed consumers to file complaints in case of violations.
Amidst increasing consumer complaints, the CCPA has issued guidelines to prevent unfair trade practices and violations of consumer rights.
According to the guidelines, “No hotels or restaurants shall add service charges automatically or by default to the food bill.”
Restaurants usually charge a service charge of 10 percent. Therefore, it stated that service charges could not be collected under any other name.
Restaurants have to clearly inform the consumer that service charges are voluntary, optional and at the discretion of the consumer.
Furthermore, no entry or provision of services restrictions based on the collection of service charges shall be imposed on consumers.
If a consumer finds a hotel or restaurant levying service charges in violation of the guidelines, then the consumer can request the concerned establishment to remove it from the bill. Apart from this, the consumer can also lodge a complaint with the National Consumer Helpline. NCH works as an alternate dispute redressal mechanism at the pre-litigation level.
Further, they can also file complaints with the Complaints Commission or through the E-daakhil portal for swift and effective resolution. Consumers can also submit complaints to the District Collector of the concerned district for investigation and further subsequent proceedings by the CCPA.
Through grievances registered on NCH, CCPA said it has observed that hotels and restaurants levy service charges by default, without first asking or informing consumers.
In accordance with the guidelines, the price of food and drinks offered by a restaurant or hotel includes the component of service. And there is no restriction on the establishments to set the prices at which they choose to offer food and beverages to the consumers. Therefore, “charging anything other than the said amount would amount to unfair trade practices under the Consumer Protection Act.”
The guidelines are in addition to the Centre’s 2017 guidelines, which state that the levy has to be voluntary and not mandatory.
(Source: PTI)