Service charge

Soon you will be able to access the consumer panel if a service fee is charged | India News

NEW DELHI: New guidelines from the Ministry of Consumer Affairs will allow people to approach consumer commissions and the Central Consumer Protection Authority (CCPA) if hotels and restaurants request service charge although the ministry asked them to stop taking the sample. It will be entirely up to customers to pay any amount, as tips and restaurants cannot, directly or indirectly, charge more than the food price.
Sources said the ministry will issue new guidelines in the coming days, which will have legal backing to deal with this threat. “There will be no room to include a service charge in the bill in the new guidelines. Previously, there was no provision in the rules for restaurants to seek redress against such charges. Consumer Protection Act had no provision for the CCPA, which is now a nodal authority to address consumer concerns,” an official said.
Previous guidelines issued in 2017, which were advisory in nature, included an optional provision regarding printing service charges in invoices. But he had clearly mentioned that the space against such a head should be left empty and it would be up to the customer to fill in any amount.
Sources said that since this provision had also created some ambiguity in the minds of consumers and restaurant operators, the new guidelines will clarify that the charging of service charges is “unlawful”.
The department had previously informed industry representatives that there is no legal value attached to levying such a charge and that consumers often view the service charge as a “service charge” and end up by paying it. The ministry had also stated that considering a customer’s entrance to a restaurant or hotel as implied consent to pay a service charge is nothing but the imposition of undue cost as a precondition to placing an order for food. He had said it fell under restrictive business practices under the Consumer Protection Act and the amended 2019 law defines what an unfair contract is.


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