Ministry releases guidelines following many complaints
On Monday, the Central Consumer Protection Authority (CCPA) announced guidelines prohibiting hotels and restaurants from charging patrons a service fee. The rules provide that service charges should not be added automatically or by default to the food bill by hotels or restaurants.
According to Nidhi Khare, the Chief Commissioner of the CCPA, who issued the recommendations, any customer who discovers that a hotel or restaurant is breaking the rules may ask to have the service charge removed from the bill total or file a complaint with the National Consumer Helpline (NCH). In addition to the District Collector, the Consumer Commission also accepts complaints.
"Pricing of the product thus covers both the goods and services component. There is no restriction on hotels or restaurants to set the prices at which they want to offer food or beverages to consumers. Thus, placing an order involves consent to pay the prices of food items displayed in the menu along with applicable taxes. Charging anything other than the said amount would amount to unfair trade practice under the Act,” the guidelines initiated.“No hotel or restaurant shall add service charge automatically or by default in the bill. Service charge shall not be collected from consumers by any other name ,” the guidelines said
Service fee collection was described as a "matter of individual policy" and "no illegality in levying such a charge" by representatives of the hotel and restaurant sector at a meeting with the Centre on June 2. Restaurant patrons cannot be asked to pay "hidden charges ," according to Piyush Goyal, Union Minister of Consumer Affairs, Food, and Public Distribution, after the meeting.
According to the Ministry, there have been a number of consumer complaints to the National Consumer Helpline (NCH) over the imposition of service fees. The guidelines also said that the cost of the food and drinks a restaurant or hotel offers includes a component of service.