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No service charge by default, Govt tells hotels & restaurants

Aggrieved consumers may lodge complaints on the National Consumer Helpline by calling 1915 or through the NCH mobile app or the e-daakhil portal.

Written by Harikishan Sharma | New Delhi |
Updated: July 5, 2022 5:43:12 am
As per the guidelines, the consumers can ask the hotel or restaurant concerned to remove the service charge from the bill amount. (Express photo by Abhinav Saha/File)

THE CENTRAL Consumer Protection Authority (CCPA) on Monday barred hotels and restaurants from adding service charge “automatically or by default” in the food bill. It 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 issued by 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,” the Union Ministry of Consumer Affairs, Food and Public Distribution said in a statement.

“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 said.

The ministry specified that there should be no restriction on entry or provision of services based on collection of service charge. “Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount,” it said.

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“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,” it said.

“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,” it said. “The consumer may also file a complaint against unfair trade practice with the Consumer Commission,” it said.

According to the guidelines issued by the CCPA for “preventing unfair trade practices and violation of consumer rights with regard to levying of service charge in hotels and restaurants”, consumers can file complaints online, via e-daakhil portal (www.e-daakhil.nic.in). In addition, they can submit a complaint to the district collector for investigation and subsequent proceedings by the CCPA. The consumers can also email their complaints to the CCPA at com-ccpa@nic.in.

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“A number of complaints have been registered in the National Consumer Helpline (NCH) by consumers with regard to levying of service charge,” said the ministry’s statement. “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 favor of consumers, holding the same as an unfair trade practice and in violation of consumer rights,” it added.

At a meeting with the Centre on June 2, representatives of the hotel and restaurant industry had said that levying service charge was a “matter of individual policy” and there was “no illegality in levying such a charge”. Following the meeting, Piyush Goyal, Union Minister of Consumer Affairs, Food and Public Distribution, had said that restaurants cannot ask customers to pay “hidden charges”.

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First published on: 04-07-2022 at 05:48:42 pm
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