District collectors told to act against hotels/restaurants which levy service charge

“The district collector may conduct investigation on violation of the guidelines on the basis of such complaint and submit his report to CCPA within 15 days,” it said.

The CCPA has also written to the chief secretaries of all states and Union territories to give publicity to the guidelines.

According to the statement, “Nidhi Khare, Chief Commissioner, CCPA has clarified that the guidelines are not advisory in nature and are fully enforceable by law.”

On July 4, the CCPA had issued guidelines stating that “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.”

It had said that in case of violation, a consumer can ask the hotel/ restaurant to remove the service charge, or seek redressal by filing a complaint.

The guidelines have been issued under Section 18(2)(l) of the Consumer Protection Act, 2019.

“The difference between the new guidelines issued by CCPA and the previous guidelines by the Department of Consumer Affairs is that, in the intervening period, the erstwhile Consumer Protection Act, 1986 was replaced with the Consumer Protection Act 2019, which came into effect in July 2020,” said the statement.

“It created a new statutory body i.e., the Central Consumer Protection Authority, which has been empowered by Parliament to take cognizance of unfair trade practices. Therefore, any violation of the guidelines will be viewed seriously and appropriate action will be taken for unfair trade practice and violating the rights of consumers,” it said.

“A number of consumers have registered their complaint on the National Consumer Helpline with regard to levying of service charge. From 01.04.2021 to 20.06.2022, 537 complaints were lodged by consumers on levying of service charge,” said the statement.

“The major grievances include hotels/restaurants making service charge compulsory, embarrassing consumers in case they resist paying service charge, adding service charge by some other name, and suppressing from consumers that paying service charge is optional and voluntary,” it said.

“From 05.07.2022 to 08.07.2022 i.e., after the guidelines were issued by CCPA, 85 complaints have been registered on NCH. The top five cities of service charge complaints are New Delhi, Bangalore, Mumbai, Pune and Ghaziabad with 18, 15, 11, 4 and 3 complaints respectively,” it said.