In a big relief to diners, the Central Consumer Protection Authority (CCPA) on Monday barred hotels and restaurants from levying service charges automatically or by default on food bills. It also allowed customers to file complaints in case of violation.
“No hotels or restaurants shall add service charge automatically or by default in the bill,” CCPA chief commissioner said in the guideline.
According to the ministry of consumer affairs, the rates for food and beverages served in hotels or restaurants already include the charge for food and service. Restaurants and hotels generally levy a service charge of 10 per cent on the food bill.
“The government’s decision to disallow the levy of service charge from hotels and restaurants is another blow to a sector reeling from the devastating impact of Covid,” Mandeep Lamba, president (South Asia) HVS ANAROCK, hospitality consultancy firm, told The Telegraph.
K.B. Kachru, vice-president, Hotel Association of India, and chairman Emeritus and principal adviser, South Asia Radisson Hotel Group, told The Telegraph: “The service charge should be optional and voluntary. We would decide on the next course of action after due deliberation with other industry bodies.”
Collection of service charges by any other name is prohibited. No hotel or restaurant can force a consumer to pay the charge. They have to inform the consumer that the service charge is voluntary.
