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New guidelines against ‘service charge’

  • Published
    13th Jul, 2022

Context:

The Central Consumer Protection Authority (CCPA) recently issued guidelines to prevent unfair trade practices, and to protect the interest of consumers with regard to the levy of service charge in hotels and restaurants.

The guidelines:

  • The CCPA has issued five major guidelines regarding the levy of service charge by restaurants and hotels, which has for long been a contentious issue and has periodically triggered complaints from consumers. These are:
  • No hotel or restaurant shall add service charge automatically or by default in the bill;
  • Service charge shall not be collected from consumers 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 the consumer’s discretion;
  • No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers; and
  • Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
  • Under the guidelines, consumers can lodge complaints against hotels and restaurants by calling the number 1915 or on the National Consumer Helpline (NCH) mobile app.
  • The consumer can complain to the Consumer Commission, or through the edaakhil portal.
  • A consumer can submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings by the CCPA.
  • A consumer can complain directly to the CCPA by sending an e-mail to com-ccpa@nic.in.
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