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Customers Cannot Be Forced To Pay Service Charges By Hotels Or Restaurants: Orders CCPA

NEW DELHI: The Central Consumer Protection Authority (CCPA) has barred hotels, restaurants, or eateries from levying any additional service charges by default or automatically with the food bill. The customers are given the authority to file any complaints with the CCPA in case of violation of this order. This rule has come into effect due to a large number of prior complaints filed over time.


It will completely be under the voluntary decision of the customers and guests to pay a tip or additional costs, apart from the billing amount. However, the restaurants and hotels cannot forcefully charge any extra amount apart from the food items. Guidelines have been ordinarily issued to avoid any unfair trade practices and violation of consumer rights concerning service taxes. 


“Hotels and restaurants can’t force customers to pay service charges. It will be a voluntary option at customer’s discretion”, the CCPA said in its order, “Service charge in hotel/restaurant bill cannot be collected from consumers by any other name; can’t be added to food bill.”


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


Under this order, if the customer discovers that a particular eatery is still demanding service charges, they can ask the authorities at the place to remove the taxes. The customers can file a complaint at The National Consumer Helpline (NCH), which works as an alternate dispute redressal mechanism at the pre-litigation level, either by calling 1915 or through the NCH mobile app.


The CCPA also observed that there were grievances faced by many customers through earlier complaints. The customers were charged such amounts involuntarily, without their knowledge that paying service charges is not mandatory. 


"Further, service charge is being levied in addition to the total price of the food items mentioned in the menu and applicable taxes, often in the guise of some other fee or charge," it added. Any refusal or restriction of entry based on payment in this regard is also considered as a part of unfair trade practice.


The Consumer Protection Act of 2019 established the CCPA to oversee issues connected to consumer rights violations, unfair business practices, and deceptive or false advertising. It was established to advance and uphold the rights of all consumers.


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Tags: #servicetax #servicecharge #restaurants


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