Chandigarh: DM issues order to prohibit service chargehttps://indianexpress.com/article/cities/chandigarh/chandigarh-dm-issues-order-to-prohibit-service-charge/

Chandigarh: DM issues order to prohibit service charge

DM Joshi stated that the service charge, being without any sanction of law, is a restrictive/unfair trade practice and it must be discontinued in the public interest.

The district magistrate on Friday issued order under Section 144 of code of criminal procedure (CrPC) prohibiting levying of service charge in Chandigarh. The order comes into force with immediate effect.

In the order, DM Ajit Balaji Joshi stated that some of the hotels/restaurants/eateries within the jurisdiction of Chandigarh are levying service charge over and above the actual bills. The said service charge is without any authority of law and is not provided under any statute. The proceeds of the service charge are retained by the hotels/restaurants/eateries and no charge is collected by the government.

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The order further reads: “As such, there is a large scale of resentment against the levy of this charge among consumers. This levy, which is not supported by any law, tends to bring about manipulation of price in such a manner as to impose on the consumers, unjustified costs. The levy of service charge by hotels/restaurants/eateries is clearly a restrictive/unfair trade practice under the Consumer Protection Act, 1986.”

Joshi stated that the service charge, being without any sanction of law, is a restrictive/unfair trade practice and it must be discontinued in the public interest.

On March 9, the administraion had declared service charge illegal with effect from April 1. The decision was backed by advice of legal remembrancer (LR) stating that service charge is illegal as it is not backed by any statute.

The administration had also withdrawn its orders allowing charging of service charge with a condition that the restaurants will have to pay VAT on the amount collected as service charge.

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The consumers can approach sub-divisional magistrate (SDM) of their respective area or food and supplies department with a complaint against hotelestaurant charging service charge.
The joint secretary, food and supplies department, Danish Ashraf, said strict action would be taken against the erring hotelesturant.