Hotels, restaurants barred from levying service charge

New Delhi, July 4

The Central Consumer Protection Authority (CCPA) has issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charge in hotels and restaurants.

Preventing unfair trade practices

• 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

The guidelines issued by the CCPA stipulate that hotels or restaurant shall not add service charge automatically or by default in the food bill.

No collection of service charge shall be done by any other name. 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. No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers.

Service charge shall not 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 norms, he can make a request to the hotel or restaurant concerned to remove service charge from the bill amount.

The consumer can also lodge a complaint on the National Consumer Helpline, which works as an alternate dispute redressal mechanism at the pre-litigation level.