Everyone likes to go out to eat. The fancy plating, the uber cool or classy and sophisticated interiors, and the mouth-watering delicacies sum up the experience of visiting a restaurant to grab a meal. But what makes one worried at the end are the taxes and other charges levied on the bill. Putting up extra costs like the service charge makes the meal costlier.
Over the past few years, a debate regarding whether restaurants should levy service charges or not has started in the country. Although, it varies from restaurant to restaurant whether they want to take the service charge or not.
But a consumer cannot be bounded to pay a service charge on the bill and can ask the restaurant to remove it. Unfortunately, some restaurants do not do so even after asking and instead embarrass the customer.
Considering this issue, new guidelines regarding the service charge have been issued by the Ministry of Consumer Affairs, Food, and Public Distribution. It is done to prevent consumers from this unfair practice and make people aware of their consumer rights.
What is a Service Charge?
A Service Charge is an additional charge that the restaurants and hotels levy on the food bill for offering their services. This charge usually ranges between 5% to 15%. While GST is a mandatory charge, the service charge is not. It is optional and depends on whether the consumer wants to pay it or not.
CCPA New Guidelines for Hotels and Restaurants regarding Service Charge
On July 4, 2022, the Central Consumer Protection Authority (CCPA) issued the new guidelines. According to them, it is done to prevent unfair trade practices and protect the interest of the consumers.
This action was taken in addition to the 2017 guidelines, which prohibited the levy of service charge. After a meeting held on June 2, 2022, between the Department of Consumer Affairs and restaurant associations and consumer organizations regarding the service charge in hotels and restaurants, it was decided that the Centre would soon release a framework.
According to these guidelines:
- No restaurant is allowed to levy a service charge automatically or by default in the bill
- Service charge cannot be collected from the consumers by any other name
- A hotel or restaurant cannot force consumers to pay the service charge. It should be informed to the customer that the service charge is voluntary and depends on the consumer’s discretion.
- No restriction on entry or provision of services based on the collection of service charge can be imposed on consumers
- Service charge cannot be collected by adding it along with the food bill and levying GST on the total amount
What happens if someone violates these guidelines?
In case any hotel or restaurant violates CCPAs new guidelines on Service charges, the following steps can be taken:
- A consumer can request the restaurant or hotel to remove the service charge.
- A complaint can be filed on the National Consumer Helpline (NCH) on their helpline number 1915 or the NCH mobile application.
- A complaint can also be made to the Consumer Commission on the e-daakhil portal’s website – www.edaakhil.nic.in.
- A consumer can also complain to the concerned District Collector or send an e-mail to [email protected]