Hotels, restaurants barred from levying service charge — here's how to raise a complaint if they do

The Central Consumer Protection Authority (CCPA) on Monday barred hotels and restaurants from levying service charge on customers and issued guidelines in this regard to prevent unfair trade practices and protect the interest of the consumers.

-No restaurant or hotel shall add service charge automatically or by default in the bill

-Service charge shall not be collected from consumers by any other name.

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

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-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.

In case a consumer finds a restaurant or hotel levying service charge, s/he can take the following steps:

-Request the concerned hotel or restaurant to remove service charge from the bill amount.

-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 via the NCH mobile app.

-File a complaint against unfair trade practice with the Consumer Commission. The complaint can also be filed electronically via the e-daakhil portal www.e-daakhil.nic.in.

-Submit a complaint to the district collector for investigation and subsequent proceeding by the CCPA. The complaint may also be sent to the CCPA by email at com-ccpa@nic.in.

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The CCPA, which was established under the Consumer Protection Act 2019, issued the guidelines after taking note of many grievances registered on the NCH regarding restaurants and hotels levying service charge on consumers.

"Only after completing the meal, a consumer is in a position to assess the quality and service, and decide whether or not to pay tip or gratuity and if so, how much. The decision to pay time or gratuity by a consumer does not arise merely by entering the restaurant or placing an order. Therefore, service charge cannot be added in the bill involuntarily, without allowing consumers the choice or discretion to decide whether they want to pay such a charge or not," the CCPA said in a statement that lays out the guidelines.