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By Fiona Mehta

 

On June 4th 2022, the Central Consumer Protection Authority (CCPA) forbade hotels and restaurants from automatically or by default including a service charge in the food bill. It stated that in the event of a violation, a customer may request that a hotel or restaurant remove the service charge or may file a complaint to obtain compensation.

“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,” the Union Ministry of Consumer Affairs, Food and Public Distribution said in a statement.

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. There should not be any collection of service charge by any other name, it added. Further, the service charge cannot be collected by adding it along with the food bill and levying GST on the total amount.

Service fee collection was described as a “matter of individual policy” and “no illegality in levying such a charge” by representatives of the hotel and restaurant sector at a meeting with the Centre on June 2. Restaurant customers cannot be asked to pay “hidden charges,” according to Piyush Goyal, Union Minister of Consumer Affairs, Food, and Public Distribution, after the meeting.

 

How can customers complain if they are charged?

Consumers can submit complaints online through the e-daakhil portal in accordance with the CCPA’s instructions for “preventing unfair trade practices and violation of consumer rights with regard to the levying of service charge in hotels and restaurants” (www.e-daakhil.nic.in). Additionally, consumers have the option of filing a complaint with the district collector for CCPA investigation and further action. The CCPA can also be contacted through email at [email protected] with consumer complaints.

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.