CCPA's directive: District Collectors to ensure enforcement of restaurants service charge guidelines

The Central Consumer Protection Authority (CCPA) has directed District Collectors to ensure enforcement of guidelines issued with regard to service charge by hotels and restaurants.

Upon receiving related complaints, the District Collector may conduct investigation pertaining to violation of the guidelines and submit the report to the authority within 15 days, said CCPA in a statement on Saturday.

In a letter to Chief Secretaries of all States, UTs and District Collectors, the CCPA has asked to arrange wide publicity of the guidelines along with its immediate implementation for protection of consumer interest. The letter gives clear direction that levying of service charge is in violation to the guidelines and constitutes unfair trade practice wherein affecting rights of consumers as a class, and cognizance of such complaints must be taken on priority.

According to CCPA, total 537 complaints were lodged by consumers on levying of service charge on National Consumer Helpline from April 1 to June 20, 2022. The major grievances include hotels, restaurants making service charge compulsory, and also adding service charge by some other name and suppressing from consumers that paying service charge is optional and voluntary.

From July 5 to 8, after the guidelines were issued, 85 complaints have been registered on NCH, the CCPA said. The top 5 cities of service charge complaints are New Delhi, Bengaluru, Mumbai, Pune and Ghaziabad with 18, 15, 11, 4 and 3 complaints respectively.

Nidhi Khare, Chief Commissioner, CCPA has also clarified that the guidelines are not advisory in nature and are fully enforceable by law.

"If any consumer finds that a hotel or restaurant is levying service charge in violation to the guidelines, a consumer may make a request to the concerned hotel or restaurant to remove service charge from the bill amount. Or 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", said CCPA.

The difference between the new guidelines issued by CCPA and the previous guidelines by the Department of Consumer Affairs is that, in the intervening period, the erstwhile Consumer Protection Act, 1986 was replaced with the Consumer Protection Act 2019, which came into effect in July 2020. It created a new statutory body - the Central Consumer Protection Authority, which has been empowered by the Parliament to take cognisance of the unfair trade practices, added CCPA in statement.