What to do if restaurants and hotels continue to levy a service charge

Guidelines for the imposition of the service fee in hotels and restaurants have been released by the Central Consumer Protection Authority (CCPA) in order to avoid unfair business practices and consumer rights violations. According to the rules, service charges cannot be included in the meal bill proactively or automatically by hotels or restaurants. Here’s all you need to know about the problem and your options if hotels or restaurants ask you to pay a service charge:

What’s the issue with service charges?

The collecting of service fees has always been optional, according to the consumers’ decision, and not required by law. However, consumers complained to the department of consumer affairs about eateries requiring such a fee.

The accusations included that restaurants were hiding the fact that paying the service charge is optional and voluntary from customers, adding it to the bill under the pretext of another tax or charge, and humiliating customers if they refused to pay the service charge.

After that, on June 2, the Department of Consumer Affairs scheduled a meeting with restaurants and hotels to discuss the imposition of a service fee. During the discussion, the consumer affairs ministry referred to the service fee as unlawful and demanded that the National Restaurant Association of India (NRAI) discontinue using it. Additionally, it said that the government would provide a legal foundation for this.

What Rules Are There?

A month after the meeting between the NRAI and the government representatives, the CCPA has now released new rules on the imposition of the service tax. It reads:

1) Service charges cannot be added to a hotel or restaurant’s meal bill automatically or by default;

2) No service price will be collected under any other name;

3) No hotel or restaurant shall require a patron to pay a service charge and should expressly state that such payment is optional, voluntary, and at the patron’s exclusive discretion;

4) Consumers must not be subject to any access restrictions or service provision limitations based on the collection of service charges; and

5) The GST will not be applied to the total after adding the service fee to the food bill.

How A Customer Can Respond If Asked To Pay A Service Charge

According to the CCPA regulations, if a customer discovers that a hotel or restaurant is charging a service charge that is against the rules:

1) A customer may ask the hotel or restaurant in question to deduct service charges from the bill amount;

2) By dialling 1915 or using the NCH mobile app, the consumer can file a complaint with the National Consumer Helpline (NCH), which serves as an alternative dispute resolution process at the pre-litigation stage;

3) The customer may also complain to the Consumer Commission about unfair business conduct. For a fast and efficient resolution, the complaint can be submitted online using the e-daakhil portal at www.e-daakhil.nic.in;

4) The consumer may also file a complaint with the District Collector of the relevant district for the CCPA to investigate.

5) The CCPA may also be contacted by email at com-ccpa@nic.in with a complaint.

The National Consumer Helpline has received many complaints from consumers over the imposition of service fees (NCH). The Ministry of Consumer Affairs said in a statement on Monday that restaurants making service charges mandatory and automatically adding them to the bill, hiding the fact that paying such a charge is optional and voluntary, and embarrassing customers, if they refuse to pay the service charge, are among the complaints made by customers.

Also Read: Ban on levy of service charge in food bills without any legal basis: NRAI

Additionally, consumer commissioners have ruled in favour of consumers in a number of cases involving the imposition of service fees, finding that doing so constitutes an unfair business practice and a breach of consumer rights.