Service charge

No hotel restaurant can add service charges automatically or by default in the food bill government

The Central Consumer Protection Authority (CCPA) on Monday banned hotels and restaurants from levying service charges automatically or by default on food bills and allowed customers to file complaints for breaches.

Amid growing complaints, the CCPA released guidelines to prevent unfair business practices and the violation of consumer rights with respect to the collection of service fees.

Per the guidelines, “No hotel or restaurant should add a service charge automatically or by default to the bill.”

There should be no collection of service fees under any other name, he added.

No hotel or restaurant can force a consumer to pay the service charge. They must clearly inform the consumer that service charges are voluntary, optional and at the discretion of the consumer.

“No restrictions on entry or provision of services based on the levying of service charges shall be imposed on consumers,” the directive states.

Also, the service charge cannot be collected by adding it to the food bill and charging the GST on the total amount.

If a consumer finds that a hotel or restaurant is charging a service charge in violation of the guidelines, he or she can ask the establishment concerned to remove it from the amount of the bill.

Consumers can also lodge a complaint with the National Consumer Helpline (NCH), which operates as an alternative dispute resolution mechanism at the pre-litigation level, by calling 1915 or via the NCH mobile app.

They can also lodge complaints with the Consumer Commission.