Hotels, restaurants cannot add service charge automatically or by default in food bill: Central Consumer Protection Authority

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The Central Consumer Protection Authority (CCPA) has issued guidelines stipulating that hotels or restaurant should not add service charge automatically or by default to food bills.

The guidelines are as follows:

Hotels or restaurant 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;

No hotel or restaurant shall force a consumer to pay 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 collection of service charge shall be imposed on consumers; and

Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount

The CCPA guidelines, issued with the aim preventing unfair trade practices and violation of consumer rights in this regard, also provides for a National Consumer Helpline (NCH) number that consumers can contact to lodge complaints.

A press release was issued by the Ministry of Consumer Affairs, Food & Public Distribution on the Press Information Bureau website which stated that a number of complaints have already been registered in the NCH by consumers with regard to levy of service charge.

“The issues raised by consumers include restaurants making service charge compulsory and adding it in the bill by default, suppressing that paying such charge is optional and voluntary and embarrassing consumers in case they resist paying service charge.Various cases relating to levying of service charge have also been decided by consumer commissions in favor of consumers, holding the same as an unfair trade practice and in violation of consumer rights,” the press release stated.

It suggested that if consumers finds a hotel or restaurant levying service charge in violation to the guidelines, they may make a request to the concerned hotel or restaurant to remove service charge from the bill amount.

Consumers may lodge complaints on the Helpline which works as an alternate dispute redressal mechanism at the pre-litigation level by calling 1915 or through the NCH mobile app.

Consumers can file complaints against unfair trade practices with the Consumer Commission, and also electronically through e-daakhil portal www.e-daakhil.nic.in.

Further, 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 [email protected]

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