Bhoomika Singh
The Ministry of Consumer Affairs, Food & Public Distribution declared the guidelines by the Central Consumer Protection Authority (CCPA) for preventing unfair trade practices and violation of consumer rights regarding levying of service charge in hotels and restaurants, in a press release on July 4, 2022.
The guidelines issued by CCPA stipulate that hotels or restaurant shall not add service charge automatically or by default to the food bill. It clarifies:
• No collection of service charge shall be done by any other name.
• No hotel or restaurant shall force a consumer to pay the service charge and shall clearly inform the consumer that the service charge is voluntary, optional and at the consumer’s discretion.
• No restriction on entry or provision of services based on the collection of service charge shall be imposed on consumers.
• The service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
If any consumer finds that a hotel or restaurant is levying service charge in violation of the guidelines, a consumer may make a request to the concerned hotel or restaurant to remove the service charge from the bill amount. Also, the consumer may lodge a complaint on the National Consumer Helpline (NCH), which works as an alternate dispute redressal mechanism at the pre-litigation level by calling 1915 or through the NCH mobile app.
The consumer may also file a complaint against unfair trade practices with the Consumer Commission. The Complaint can also be filed electronically through e-daakhil portal www.e-daakhil.nic.in for its speedy and effective redressal. Furthermore, the consumer may submit a complaint to the District Collector of the concerned district for investigation and subsequent proceeding by the CCPA. The complaint may also be sent to the CCPA by e-mail at com-ccpa@nic.in.
Just guidelines, not a Law!
Reacting to the guidelines issued by CCPA, the Jt. Hon. Sec. of Federation of Hotel & Restaurant Associations of India (FHRAI), Pradeep Shetty stated that these are just guidelines, not a new law. He said, “These are a new set of guidelines that have been issued by CCPA and not a new law. Most of these guidelines have already been followed by hotels and restaurants. Nobody was forced to pay the service charge nor was any consumer turned back if they disagreed to pay it.”
Shetty further added, “FHRAI may approach the CCPA seeking clarifications and to submit further suggestions. Unfortunately, the beneficial global practice for employees will take a beating. FHRAI will issue a detailed statement after examining and studying the guideline.”
Calling the service charge not illegal, the Vice President of FHRAI feels disheartening that the hospitality industry is constantly singled out. Gurbaxish Singh Kohli says, “It is a charge collected for the benefit of the staff which includes everyone from the waiters to the personnel working in the kitchen who have served a consumer directly and indirectly. Besides, no hospitality establishment coaxes a consumer to pay it if for any reason they choose not to.”
He further points out that there are several online websites and apps that charge convenience fees including the Government-run IRCTC. “We ask the Government to introduce a law that is uniform to all businesses and that the hospitality industry is not discriminated against,” says Kohli.
