No Hotels or Restaurants can Add Service Charge Automatically or by Default in Food Bill: Consumer Affairs Ministry

Central Consumer Protection Authority (CCPA) has issued guidelines to prevent unfair trade practises and violations of consumer rights in hotels and restaurants that charge a service charge. The CCPA guidelines state that hotels and restaurants must not automatically or by default include a service charge in the food bill.

No service charge shall be collected under any other name. No hotel or restaurant shall force a customer to pay a service charge and shall clearly inform the customer that the service charge is voluntary, optional, and at the discretion of the customer. Consumers shall not face any entry or service provision restrictions based on the collection of a service charge.

The service charge shall not be collected by adding it to the food bill and imposing GST on the total amount. By clicking on the link, you can access the guidelines.

If a consumer discovers that a hotel or restaurant is levying a service charge in violation of the guidelines, the consumer may request that the service charge be removed from the bill amount. In addition, the consumer may file a complaint with the National Consumer Helpline (NCH), which serves as an alternative dispute resolution mechanism at the pre-litigation level, by dialing 1915 or using the NCH mobile app.

The consumer may also file a complaint with the Consumer Commission about unfair trade practices. The complaint can also be filed electronically via the e-daakhil portal at www.e-daakhil.nic.in for prompt and effective resolution.

In addition, the consumer may file a complaint with the District Collector of the relevant district for investigation and subsequent action by the CCPA. The complaint can also be emailed to the CCPA at com-ccpa@nic.in.

Consumers have filed a number of complaints with the National Consumer Helpline (NCH) regarding the imposition of service charges. Consumers have complained about restaurants making service charges mandatory and automatically adding them to their bills, hiding the fact that such charges are optional and voluntary, and embarrassing customers who refuse to pay them.

Several cases involving the imposition of service charges have also been decided in favour of consumers by consumer commissions, with the same being deemed an unfair trade practice and a violation of consumer rights.

(Source: PIB)