Restaurants can't add service charge in the food bill: CCPA

The Central Consumer Protection Authority (CCPA) on Monday said that hotels or restaurants shall not add service charge automatically or by default in the food bill.

The guidelines were issued for preventing unfair trade practices and violation of consumer rights with regard to levying of service charge in hotels and restaurants.

"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," the guidelines say.

"No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers. Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount," they say.

This comes a month after the government said it will soon come up with a robust framework to ensure strict compliance by all stakeholders with regard to service charge levied by restaurants and hotels as it adversely affects consumers on a daily basis.

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 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.

The consumer may also file a complaint against unfair trade practice with the Consumer Commission. The Complaint can also be filed electronically through the e-daakhil portal. The consumer may submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings by the CCPA.

A number of complaints have been registered in the National Consumer Helpline (NCH) by consumers with regard to levying 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.

The government had earlier expressed its displeasure over restaurants allegedly making service charges compulsory even though such charges are subject to the customer's discretion.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.