Hotels, restaurants barred from levying service charge

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The Central Consumer Protection Authority (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.

Amid rising complaints, the CCPA has issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charge. As per the guidelines, "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 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 said. 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.

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.

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