Hotels and restaurants can’t force customers to pay service charge, says Centre
The Central Consumer Protection Authority (CCPA), the government’s top consumer watchdog, on Monday issued guidelines for “preventing unfair trade practices and violation of consumer rights with regard to the levying of service charge in hotels and restaurants.”
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.”
“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 statement said.
The statement further said that no restriction on entry or provision of services based on the collection of the 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,” the statement said.
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.
“Also, the consumer may lodge a complaint on the National Consumer Helpline (NCH), which works as an alternative dispute redressal mechanism at the pre-litigation level, by calling 1915 or through the NCH mobile app,” it said.
“The consumer may also file a complaint against unfair trade practice with the Consumer Commission,” it added.
Under the guidelines, consumers can also file complaints electronically through the e-daakhil portal, http://www.e-daakhil.nic.in .
The statement said, “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,” it said.
“Various cases relating to levying of service charge have also been decided by consumer commissions in favour of consumers, holding the same as an unfair trade practice and in violation of consumer rights,” it added.
