The Department of Food & Supplies, Consumer Affairs, and Legal Metrology, U.T. Chandigarh Issues Advisory to Prevent Automatic Levy of Service Charges by Hotels & Restaurants

Background and the CCPA Order

The Department of Food & Supplies, Consumer Affairs, and Legal Metrology, U.T. Chandigarh, issued an advisory to hotels and restaurants in compliance with the Central Consumer Protection Authority (CCPA) guidelines under the Consumer Protection Act, 2019. This advisory prohibits the automatic addition of service charges to bills and ensures that consumers are fully aware of their rights. The move was prompted by widespread complaints that many restaurants were forcibly levying service charges without informing customers that such charges are voluntary.

The said CCPA guidelines are applicable across India, ensuring uniform consumer protection nationwide. As such, the advisory issued by the Department of Food & Supplies, Consumer Affairs, and Legal Metrology, U.T. Chandigarh, is in line with these national guidelines and holds applicability throughout the country, reinforcing consumer rights in all states and union territories.

Many consumers were under the mistaken belief that the service charge was a mandatory government tax, leading to additional tipping and unfair charges. The CCPA had clarified that service charges should not be imposed involuntarily and should only be paid at the discretion of the consumer.

Key Guidelines to Prevent Automatic Service Charges

1. No automatic addition of service charges to bills. Consumers should have the choice to pay voluntarily.
2. Hotels and restaurants cannot mislead customers by adding service charges under different names.
3. No restriction on entry or service should be imposed based on payment of service charges.
4. Businesses cannot levy GST on service charges, as these are not mandatory fees.
5. Consumers have the right to request removal of service charges from the bill.

Consumer Redressal Mechanism

If a restaurant or hotel violates these guidelines, consumers can:

• Request removal of the service charge from the bill.
• Lodge a complaint via the National Consumer Helpline (1915) or WhatsApp at 8800001915.
• File an online complaint through www.e-jagriti.gov.in.
• Escalate the issue to the CCPA via email at com-ccpa@nic.in.
• Report the violation to the Chandigarh Consumer Affairs Department at 0172-2703956 or fcs-chd@nic.in.

Conclusion

As per the Central Consumer Protection Authority (CCPA) guidelines under the Consumer Protection Act, 2019, service charges cannot be added to a bill involuntarily and must be left to the consumer’s discretion. These guidelines prevent unfair levies, ensuring transparency and fair-trade practices in the hospitality industry. Consumers are encouraged to report violations to uphold their rights and ensure accountability in the sector.

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