Hotels cannot forcibly collect service charges from customers: Food & Consumer Affairs

After the Central Consumer Protection Authority (CCPA) issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charges in hotels and restaurants, Additional Secretary in the Government of India (Food and Consumer Affairs) on Wednesday clarified that hotels cannot forcibly collect service charges from customers.

After the Central Consumer Protection Authority (CCPA) issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charges in hotels and restaurants, Additional Secretary in the Government of India (Food and Consumer Affairs) on Wednesday clarified that hotels cannot forcibly collect service charges from customers. "Charging service charges from customers will now cost the hotel and restaurant owners. If a customer wants to pay a service charge of his own free will, then it is a different matter but hotel owners cannot forcibly collect service charges from customers," Additional Secretary in the Government of India (Consumer Affairs), Nidhi Khare told ANI.

She also informed that the authorities have launched a helpline number '1915' for the consumers. "If a customer is a victim of extortion, then the National Consumer Protection Authority has issued a helpline number for such customers for complaints, which will be the helpline number 1915," she added.

Khare found it surprising and called it double charges on customers. "Service charge is added to whatever food is served and then GST tax is levied on the total amount which is a double whammy on the customers," she noted.

The guidelines issued by CCPA on Monday stipulate that hotels or restaurants shall not add service charges automatically or by default to the food bill. No collection of service charge shall be done by any other name. No hotel or restaurant shall force a consumer to pay a service charge and shall clearly inform the consumer that the service charge is voluntary, optional and at the consumer's discretion. No restriction on entry or provision of services based on a collection of service charges shall be imposed on consumers. The service charge shall not be collected by adding it along with the food bill and levying GST on the total amount. The guidelines can be accessed by clicking on the link. (ANI)

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