Service charge

The Center plans to appeal against the suspension of service fee suspension by the Delhi High Court

The central government will appeal a Delhi High Court order that suspended Central Consumer Protection Authority (CCPA) guidelines prohibiting hotels and restaurants from levying service charges on food bills, said a manager.

“We are looking at what will be the way to appeal,” the official said on condition of anonymity on Tuesday.

Earlier this month, the CCPA ordered restaurants and hotels to clearly inform consumers that service charges were voluntary, optional and at the discretion of consumers and that they could not restrict entry or refuse services on the basis of charging a service fee. “The service charge will not be collected by adding it to the food bill and deducting GST from the total amount,” the guidelines state.

However, High Court Justice Yashwant Varma, while hearing motions filed by the National Restaurant Association of India and the Federation of Hotel and Restaurant Associations of India challenging the CCPA guidelines, said: “If you don’t want don’t pay, don’t enter this restaurant. It’s ultimately a matter of choice.”

The guideline was the result of numerous complaints the Department of Consumer Affairs had received through the National Consumer Helpline. From April 2021 to July 2022, no less than 537 complaints were filed by consumers on this subject.

Major grievances included restaurants making service charges mandatory, embarrassing consumers in case they resisted payment of service charges, adding service charges under another name, and consumer pressure for payment of service charges is optional and voluntary.