Service charge

Consumer Protection Authority Challenges Delhi Hc Restaurant Service Charge Order


Last month, the Delhi HC suspended the latest CCPA guidelines prohibiting restaurants and hotels from levying service charges on food bills.

The Central Consumer Protection Authority (CCPA) has challenged Delhi HC’s order over the issue of service charges and the court is expected to review it on August 16, people familiar with the matter have said. CNBC-TV18.

On July 4, the Central Consumer Protection Authority (CCPA) prohibited hotels and restaurants from collecting service charges from customers and issued guidelines in this regard to prevent unfair business practices and protect the interests of consumers. .

Judge Yashwant Varma, while dealing with motions from the NRAI and the Federation of Hotel and Restaurant Associations of India challenging the CCPA July 4 guidelines, said the matter needed to be looked into and ordered the authorities to file their response.

“The matter must be reviewed. Accordingly, until the next filing date, the instructions contained in paragraph 7 of the impugned directive of July 4, 2022 will remain suspended,” the court ordered last month.

According to CCPA guidelines, hotels and restaurants were not allowed to collect service charges from guests. They were also prohibited from collecting service fees from consumers under any other name, nor were they allowed to force customers to pay them.

The CCPA, which was set up under the Consumer Protection Act 2019, had issued the guidelines after noting numerous grievances registered with the NCH about restaurants and hotels levying service charges on consumers. .

“It is only after finishing the meal that a consumer is able to assess the quality and service, and decide whether or not to pay a tip or tip and, if so, how much The decision to pay time or a tip by a consumer does not arise simply by entering the restaurant or placing an order, therefore a service charge cannot be unintentionally added to the bill, without letting consumers the choice or discretion to decide whether they want to pay such fees or not,” the CCAC had said in a statement that mentioned the guidelines.