Service Charge By Restaurants: What Can You Do If You Are Still Asked To Pay This Extra Levy?

Even as the government has issued guidelines to prevent unfair trade practices and the violation of consumer rights with regard to levying of the service charge in hotels and restaurants, customers can ask restaurants to remove the charge if they still include that in the bill. Customers has multiple options to follow in case the restaurant or hotel is adamant on levying the service charge. Here’s what is service charge, what the government says, and what customers can do if asked to pay this charge.

What Is A Service Charge?

The overall bill of a restaurant comprises the price of food and beverages and GST. Apart from this, restaurants also levy a service charge that ranges between 5 per cent and 10 per cent. The service charge has become a matter of discussion with the consumer affairs ministry calling a meeting with restaurant bodies after complaints from customers and later issuing guidelines asking hotels or restaurants not to add such charge automatically or by default in the food bill.

What Does The Government Say?

Following a meeting with restaurant and hotel bodies, the government issued guidelines on the service charge. The rules were issued by the Central Consumer Protection Authority (CCPA) a month after the meeting between restaurants and the government officials. The guidelines say:

1) Hotels or restaurants shall not add the service charge automatically or by default in the food bill;

2) No collection of service charge shall be done by any other name;

3) No hotel or restaurant shall force a consumer to pay service charge and shall clearly inform the consumer that the service charge is voluntary, optional and at consumer’s discretion;

4) No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers; and

5) Service charge will not be collected by adding it along with the food bill and levying GST on the total amount.

What If You Are Still Asked To Pay Service Charge?

According to the latest CCPA guidelines, if a consumer finds that a hotel or restaurant is levying a service charge in violation of the guidelines:

1) The consumer may make a request to the concerned hotel or restaurant to remove the service charge from the bill amount;

2) The consumer may lodge a complaint on the National Consumer Helpline (NCH), which works as an alternate dispute redressal mechanism at the pre-litigation level by calling 1915 or through the NCH mobile app;

3) The consumer may also file a complaint against the unfair trade practice with the Consumer Commission. The complaint can also be filed electronically through e-daakhil portal www.e-daakhil.nic.in for its speedy and effective redressal;

4) The consumer may also submit a complaint to the District Collector of the concerned district for investigation and subsequent proceeding by the CCPA

5) The complaint may also be sent to the CCPA by e-mail at [email protected].

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