SERVICE CHARGE GUIDELINES
Source: Indian Express
Context
The Central Consumer Protection Authority (CCPA) on Monday issued guidelines to prevent unfair trade practices and to protect the interest of consumers regarding the levy of service charges in hotels and restaurants.
Consumers can lodge complaints against hotels and restaurants by calling 1915.
Guidelines
The CCPA has issued five major guidelines
- No hotel or restaurant shall add a service charge automatically or by default to the bill.
- The Service charges shall not be collected from consumers by any other name.
- No hotel or restaurant shall force a consumer to pay the service charge and shall inform the consumer that the service charge is voluntary and optional.
- No restriction on entry or provision of services based on a collection of service charge shall be imposed and
- Service charge shall not be collected by adding it to the food bill and levying GST on the total amount.
In case of violation
The consumer has four options at different levels of escalation.
He or she can request the hotel or restaurant to remove the service charge from the bill.
He or she can complain to the National Consumer Helpline (NCH) by calling 1915 or on the NCH mobile app.
The Consumer can complain to the Consumer Commission or through the edaakhil portal www.edaakhil.nic.in.
He or she can submit a complaint to the District Collector for investigation and subsequent proceedings by the CCPA.
A consumer can compare directly to the CCPA with an email to com-ccpa@nic.in.
why were these guidelines issued?
The CCPA took cognisance of grievances regarding restaurants and hotels levying service by default, without first asking or informing consumers.
On June 2, the Department of Consumer Affairs under the Ministry of Consumer Affairs, Food and Public Distribution met with restaurant associations and consumer organisations over the issue.
After the meeting, the department announced that the centre would soon release a robust framework.
To ensure strict compliance with its 2017 guidelines that prohibited the levy of service charges.
A day later, Union Minister of Consumer Affairs, Food and Public Distribution Piyush Goyal said restaurants cannot ask customers to pay hidden charges.
Restaurants can raise the wages of their workers by raising rates.
They are free to increase the wages of their employees and they are free to charge any rate.
But they cannot levy a charge by deceit and when some of them do so and the others don't,
how will people know what the real price is?
Restaurants and hotels
During the June 2 meeting, representatives of the hotel and restaurant industry told the Centre that the levy of service charge by a restaurant is a matter of individual policy.
There is no illegality in levying such a charge.
They said that service charge brings in revenue to the government since tax is paid on it.
