Restaurants barred from imposing service charge: What customers should know

Central Consumer Protection Authority has enabled customers to file complaints in case of violations around service charge levy by establishments.

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Hotels and restaurants have been barred from automatic or default levy of service charge on food bills. In its latest guidelines, the Central Consumer Protection Authority (CCPA) has also enabled the customers to file complaints in case of violations by establishments.

The move comes amid growing complaints about service charge being levied. The guidelines will help to prevent violation of consumer rights and deter unfair trade practices on the issue.

"No hotels or restaurants shall add service charge automatically or by default in the bill," the guidelines state.

Establishments cannot engage in collection of service charge under any other name, it mentioned.

“No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers,” the guidelines added.

Here’s what customers should know about their rights as per the new service charge guidelines by CCPA.

  • Hotels and restaurants cannot levy service charge by default or automatically.
  • Customers cannot be forced to pay service charge.
  • Entry or provision of services cannot be restricted on the basis of imposed service charge.
  • Customers need to be clearly informed that the service charge is optional, voluntary and at their discretion.
  • Restaurants and hotels cannot collect service charge by adding it along with the food bill or levying GST on the total bill amount.
  • If a customer finds service charge levied in violation of the guidelines, he or she can request the restaurant or hotel to exclude it from the bill.

How customers can lodge complains regarding service charge?

A customer can file a complaint using the National Consumer Helpline (NCH) by calling 1915 or accessing via the NCH mobile app. The helpline works as an alternate mechanism for dispute redressal at the pre-litigation level. Complains can also be lodged with the Consumer Commission.

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(With inputs from agencies)

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