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New Service Charge Rules: what you can do if a restaurant adds it to your bill

by Rishika Choudhury

Date & Time: Jul 07, 2022 7:01 AM

Read Time: 2 minute


On July 4, the Central Consumer Protection Authority (CCPA) released rules to stop unfair business practises and safeguard consumers' interests regarding the imposition of service charges in hotels and restaurants. Under the guidelines, consumers can lodge complaints against hotels and restaurants by calling the number 1915.
The Consumer Protection Act, 2019, established the CCPA in July 2020 to advance, defend, and uphold the rights of consumers as a group and to look into, pursue, and penalise those who violate such rights.

What do the CCPA’s guidelines say?

The CCPA has issued five major guidelines regarding the levy of service charge by restaurants and hotels, which has for long been a contentious issue and has periodically triggered complaints from consumers.

The guidelines say:

(i) No hotel or restaurant shall add service charge automatically or by default in the bill;
(ii) Service charge shall not be collected from consumers by any other name;
(iii) No hotel or restaurant shall force consumers to pay service charges and shall clearly inform the consumer that service charge is voluntary, optional, and at the consumer’s discretion;
(iv) No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers; and
(v) Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
What can a consumer do in case of a violation of these guidelines?
The consumer has four options at different levels of escalation in case she spots the levy of service charge in her bill.
First, she can make a request to the hotel or restaurant to remove the service charge from her bill.
Second, she can lodge a complaint on the National Consumer Helpline (NCH), which works as an alternative dispute redressal mechanism at the pre-litigation level. The complaint can be lodged by making a call on the number 1915, or on the NCH mobile app.
Third, the consumer can complain to the Consumer Commission, or through the edaakhil portal, http://www.edaakhil.nic.in.
Fourth, she can submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings by the CCPA. A consumer can complain directly to the CCPA by sending an e-mail to com-ccpa@nic.in.

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