Hotels, Restaurants Barred From Adding Service Charge Automatically Or By Default


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.

According to the CCPA’s guidelines, service charges cannot be added to the food bill automatically or by default by hotels or restaurants.

“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, the official statement by the Ministry of Consumer Affairs, Food and Public Distribution said today.

“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. The guidelines can be accessed by clicking on the link,” read the statement.

Consumers may ask the concerned hotel or restaurant to remove the service charge from the bill amount if they find that the hotel or restaurant is charging customers in violation of the rules. By calling 1915 or using the NCH mobile app, the consumer can also file a complaint with the National Consumer Helpline (NCH), which serves as an alternative dispute resolution process at the pre-litigation stage.

The Consumer Commission will also accept complaints from consumers regarding unfair business practises. For quick and efficient resolution, the Complaint may also be submitted electronically using the e-Daakhil site or by e-mail to CCPA. The consumer may also file a complaint with the district collector of the relevant district for the CCPA to investigate and take appropriate action.

Numerous complaints about the imposing of service fees have been made by customers to the National Consumer Helpline (NCH). Customers have complained that restaurants make service charges mandatory and automatically put them in the bill, concealing the fact that such charges are optional and voluntary.

Consumer commissioners have also ruled in favour of consumers in a number of cases involving the imposition of service fees, finding that doing so is an unfair business practise and a breach of consumers’ rights.



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