CCPA issues guidelines against the default levy of service charges by hotels and restaurants.

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The Central Consumer Protection Authority (CCPA) has made an order against the practice of automatically adding service charges by hotels and restaurants after widespread complaints and queries regarding its application.

“It may be mentioned that a component of service is inherent in the price of food and beverages offered by the restaurant or hotel... Charging anything other than the said amount would amount to unfair trade practice under the Act.”

CCPA went one step further and stated that denying entry to a hotel and restaurant on the basis of payment of service charge also amounted to an unfair trade practice.

The following guidelines were issued by CCP with regard to the same.

1. No hotel or restaurant shall add a service charge automatically or by default in the bill.

2. Service charges shall not be collected from consumers by any other name.

3. No hotel or restaurant shall force a consumer to pay a service charge and shall clearly inform the consumer that the service charge is voluntary, optional and at the consumer's discretion.

4. No restriction on entry or provision of services based on the collection of service charge shall be imposed on consumers.

5. Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.

The CCP also listed various redressal mechanisms which are as follows:

1. Make a request to the concerned hotel or restaurant to remove the service charge from the bill amount.

2. 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.

3. File a complaint against unfair trade practice with the Consumer Commission. The Complaint can also be filed electronically through the e-daakhil portal [www.edaakhil.nic.in] for its speedy and effective redressal.

4. Submit a complaint to the District Collector of the concerned district for investigation and subsequent proceeding by the CCP A. The complaint may also be sent to the CCPA by e-mail at com-ccpa@nic.in.

Guidelines to prevent unfair trade practices and protection of Consumer Interest with rega.

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To read more about the CCPA, view the document below:

CENTRAL-CONSUMER-PROTECTION-AUTHORITY–A-CRITICAL-ANALYSIS-Vagish-K-Singh-and-Ashish-K-Sing.

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