Hotels, restaurants will no longer be able to charge service charges on food bills from consumers
Service charge cannot be collected by adding it to the food bill and levying GST on the total amount.
Service Charges: Hotels and restaurants will no longer be able to charge service charges on food bills from customers. The Central Consumer Protection Authority (CCPA) on Monday barred hotels and restaurants from adding automatic service charges to food bills. Consumers will be able to report any such violation.
CCPA issued guidelines
Amid rising complaints, the CCPA issued guidelines to prevent unfair trade practices and violation of consumer rights. As per the guidelines, 'No hotel or restaurant shall automatically add service charges to the bill.' Also, no service fee will be charged by any other name.
Hotel-restaurant cannot force you to pay service fee
It states that no hotel or restaurant can compel customers to pay service charges. If the customer wishes, he can pay the service charge. This will be completely voluntary, optional and at the discretion of the consumer. As per the guidelines, 'no restriction shall be imposed on the consumers for admission or services on the basis of collection of service charges'.
Cannot add service charge with bill
Further, the service charge cannot be collected by adding it to the food bill and levying GST on the total amount. If a consumer finds that the hotel or restaurant is charging service charges in violation of the guidelines, he can request the concerned entity to remove it from the bill amount.