Service charge levied by restaurants unfair trade practice, CCPA issues guidelines

The Central Consumer Protection Authority (CCPA) has issued guidelines terming the service charge levied by restaurants as unfair trade practice.

According to the Ministry of Consumer Affairs, the rates for food and beverages served in hotels or restaurants already include the charge for food and service.

As per the guidelines, "No hotels or restaurants shall add service charge automatically or by default in the bill."

Restaurants and hotels generally levy a service charge of 10 per cent on the food bill.

The guidelines said there should not be any collection of service charge by any other name.

No hotel or restaurant can force a consumer to pay service charge. They have to clearly inform the consumer that service charge is voluntary, optional and at consumer's discretion.

"No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers," the guideline added.

Further, service charge cannot be collected by adding it along with the food bill and levying GST on the total amount.

If any consumer finds that a hotel or restaurant is levying service charge in violation of the guidelines, s/he can request the concerned establishment to remove it from the bill amount.

The consumers can also 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.

They can also file complaints with the Consumer Commission. The complaint can be filed electronically through the e-Daakhil portal for its speedy and effective redressal.

(With inputs from PTI)