Restaurants Cannot Force Customers To Pay Service Charge: CCPA

If you have ever found yourself in an awkward situation when you were compelled to ask the waiter to explain the exorbitant service charge levied, here’s relief. You can now enjoy your meal in peace without thinking about the resultant service or any arbitrary additional charges for that matter, as the Central Consumer Protection Authority (CCPA) has issued guidelines to prevent unfair trade practices and violation of consumer rights in hotels and restaurants.  

According to the new guidelines, restaurants and hotels cannot force customers to pay service charges. This will, however, remain a voluntary option for customers.  

The regulations also forbid a spike in service charges without any explanation, and forcing customers to pay the same. Restaurants have to make it clear to customers that the service charge is optional and voluntary at the customer's discretion. 

So, what can customers do if the restaurant owners are adamant about service charges? Under such circumstances, customers can lodge a complaint on National Consumer Helpline number 1915 against hotels/restaurants charging service charge, the CCPA order stated.

The regulations also specify that it has to be ensured that service charge in the hotel/restaurant bill is not collected from consumers by any other name, nor is it added to the food bill.

Earlier, the Department of Consumer Affairs (DoCA) had announced how they were working to develop a stronger framework to encourage transparency. They said that authorities were also toward enforcing strict compliance by the stakeholders with regard to the service charge imposed by restaurants and hotels, since it affects customer experience on a regular basis.

On the subject of service charge, the National Restaurant Authority of India clarified that it is not an ‘illegal’ activity to levy service charge since DoCA has not yet decided whether to adopt the new framework suggested.  

However, the NRAI had said that levying service charge is neither illegal nor an unfair trade practice, and creating a debate around is hindering smooth operations of restaurants, considering that the fee is only mostly used by restaurants and hotels to pay their staff and employees.