Hotels, restaurants are prohibited from imposing a service charge

The Central Consumer Protection Authority (CCPA) on Monday banned hotels and restaurants from charging service charge automatically or by default on food bills and allowed customers to file complaints in case of violation.

Amid growing complaints, the CCPA has issued guidelines to prevent unfair trade practices and violation of consumer rights regarding the collection of service fees.

According to the guidelines, “No hotels or restaurants will add a service charge automatically or by default to the bill.”

There should not be any collection of service charge under any other name, he added.

No hotel or restaurant can force the user to pay a service charge. They must clearly inform the user that the service fee is voluntary, optional and at the discretion of the user.

“No restriction on entry or provision of services on the basis of collection of service charge should be imposed on users,” the guidelines said.

Also, service charge cannot be collected by adding it to the meal bill and charging GST on the total.

If any user finds that a hotel or restaurant is charging a service charge in violation of the guidelines, he/she can ask the respective establishment to remove it from the bill amount.

Consumers can also file a complaint with the National Consumer Helpline (NCH), which works as an alternative dispute resolution mechanism at the pre-litigation level, by calling 1915 or through the NCH mobile app.

They can also lodge complaints with the Consumer Protection Commission.