Service charge

Service charge guidelines issued to ensure consumers have choice: Hub to Delhi HC

Seeking vacation from court-ordered stay on guidelines prohibiting hotels and restaurants from adding service charges automatically in the bill, the Center and Central Consumer Protection Authority (CCPA) told the Delhi High Court that a restaurant is free to decide the prices of food and services, and the guidelines only ensure that consumers have the choice to decide whether they want to pay the service charge or not.

Giving time to the National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India to respond to the government’s position, Justice Yashwant Varma scheduled the case for hearing on 6 october. The court also extended the interim suspension of the guidelines. .

The Department of Consumer Affairs and the CCPA, in the application, said more than 1,105 complaints were registered by consumers on the National Consumer Helpline after the guidelines were issued, regarding unfair collection of service charges.

“The guidelines were issued in response to numerous consumer complaints across the country pointing out that service charges were unintentionally collected even when the service provided by the restaurant or hotel was unsatisfactory,” they said. stated in the response filed by attorney Sandeep Kumar Mahapatra.

The The CCPA, in guidelines issued on July 4, had stated that the service fee would not be collected consumers under any other name. “The service charge will not be collected by adding it to the food bill and deducting GST from the total amount,” it said in guidelines issued to prevent unfair trade practices and protect consumer interests. regarding the levying of service charges in hotels and restaurants. .

In hearing motions filed by the NRAI and the Federation of Hotel and Restaurant Associations of India, Judge Varma on July 20 remained subject to CCPA guidelines subject to union members guaranteeing that the collection of a service charge in addition to price and taxes, and the customer’s obligation to pay the same “is duly and prominently displayed on the menu or in other places”.

In response to the petitions, the CCPA, in a response dated Aug. 30, said such disclosure by hotels and restaurants is not sufficient to assume that a consumer is ready and willing to pay service charges. . Mandatory service charges go directly against consumer rights, he added.

“When a consumer uses the service of a hotel or restaurant, he/she uses the services of the hotel or restaurant as a whole and does not take any separate service from the staff/employees of the restaurant/hotel individually”, reads -on the answer, adding that the burden of salaries of employees or staff cannot be imposed on consumers.

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