Service charges by Hotels and Restaurants: Customers empowered to approach Consumer Court
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Service charges by Hotels and Restaurants: Customers empowered to approach Consumer Court

July 2, 2022

New guidelines will make levying service charge ‘illegal’

New Delhi: Coming to the aid of Hotel and Restaurant customers, the Ministry of Consumer Affairs has laid out new guidelines on levy of service charges, according to which people will be empowered to approach Consumer Commissions and the Central Consumer Protection Authority (CCPA) if Hotels and Restaurants levy service charge despite the Ministry asking them to stop making the levy. Following the fresh guidelines, it will now be completely up to the customers to pay any amount as tip and eateries cannot directly or indirectly levy any charge more than the mentioned rate of food items.

The Ministry will soon come out with the fresh guidelines, which will have the legal backing to deal with this menace.

There will be no scope for including any service charge in the Bill covering the new guidelines, it is learnt.

Earlier there was no provision in the rules to seek redressal against such charge by the eateries. The earlier Consumer Protection Act had no provision for CCPA, which will now become a nodal authority to address consumers’ concerns.

The earlier guidelines of 2017, which was advisory in nature, had an optional provision for printing service charge in the bills. But it had clearly mentioned that the space in that head must be left blank and it would be up to the customers to fill any amount of their liking. Sources said that since this provision had also created ambiguity in the minds of consumers and eatery operators, the new guidelines will clearly specify that levying service charge is ‘Illegal’. The Ministry had earlier informed the Hotel industry representatives that there is no legal sanctity for levying service charge and customers often take the service charge as ‘Service tax’ and end up paying this charge, the sources added.

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