Hotels, restaurants barred from levying service charge; here's all you need to know

The CCPA barred hotels and restaurants from levying service charge automatically or by default in food bills and allowed customers to file complaints in case of violation.  

The Central Consumer Protection Authority (CCPA) on Monday prohibited hotels and restaurants from adding service fees to meal bills automatically or by default and permitted customers to protest in cases where this occurred.

The CCPA has released guidelines for combating unfair business practices and abuses of consumer rights surrounding the imposition of service fees in response to an increase in complaints.

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

There should not be any collection of service charge by any other name, it added. No hotel or restaurant can force a consumer to pay a service charge. 

They must inform the consumer that the 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," the guideline said. 

Additionally, the service charge cannot be collected by including it in the food bill and adding GST to the final total. Any customer can ask the concerned establishment to deduct the service charge from the bill amount if they discover that a hotel or restaurant is charging one in contravention of the rules.

By dialling 1915 or using the NCH mobile app, customers can also file a complaint with the National Consumer Helpline (NCH), which serves as an alternative dispute resolution process at the pre-litigation level. Additionally, they are able to complain to the Consumer Commission.

(With inputs from PTI)