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July 5, 2022

India’s CCPA bans restaurants from levying default service charge

The guidelines state that service charges are completely voluntary and can only be added to a bill at the customer’s discretion.

The Central Consumer Protection Authority (CCPA) in India has issued new guidelines to prevent restaurants and hotels from adding default service charges to food bills amid rising complaints.

In a statement, India’s Ministry of Consumer Affairs, Food and Public Distribution said that the new guidelines were issued to address ‘unfair trade practices’ and to protect consumer rights related to the levying of service charges.

The statement continued: “A number of complaints have been registered in the National Consumer Helpline (NCH) by consumers with regard to levying of service charge.

“The issues raised by consumers include restaurants making service charge compulsory and adding it in the bill by default, suppressing that paying such charge is optional and voluntary and embarrassing consumers in case they resist paying service charge.”

According to the latest guidelines, restaurants or hotels cannot add a service charge to the bill automatically or by default. Eateries are also prohibited from collecting service charges under other names.

Additionally, hotels and restaurants are directed to inform customers that such charges are completely voluntary and can only be added to a bill at the customer’s discretion.

The guidelines also state that consumers can request for a service charge to be removed.

If the restaurant does not oblige, the consumer can lodge a complaint with the NCH or Consumer Commission for redressal.

Meanwhile, the Federation of Hotel and Restaurant Associations of India vice-president Gurbaxish Singh Kohli told The Times of India that businesses are following most of the guidelines issued by the CCPA.

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