Legal provisions of service charges by the restaurants

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The Central Consumer Protection Authority (CCPA) earlier on released a group of guidelines that stated, restaurants and hotels aren't any longer alleged to add charge to the bill by default. CCPA and also the National Restaurant Association of India(NRAI) had been hostile with one another over the row of imposing a charge on restaurant goers.

The guidelines that were issued by CCPA earlier on, stated that charge was optional and consumers aren't any longer sure to pay the sum. Not only that, consumers can now request the restaurant to get rid of the service fee or perhaps file a complaint against unfair trade practice with the buyer Commission.

Service charge may be a a part of an owner’s discretion yet as decision regarding the full price payable by a customer with regards to the sale or service of a product. It constitutes one in all the components of the whole price of the merchandise.

Under the rules, consumers can lodge complaints against hotels and restaurants by calling the quantity 1915.

The CCPA was established in July 2020 under the patron Protection Act, 2019, to promote, protect, and enforce the rights of consumers as a category, and to research, prosecute, and punish violators.

The CCPA has issued five major guidelines regarding the levy of charge by restaurants and hotels, which has for long been a contentious issue and has periodically triggered complaints from consumers. the rules say:

(i) No hotel or restaurant shall add service fee automatically or by default within the bill;

(ii) charge shall not be collected from consumers by the other name;

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

(iv) No restriction on entry or provision of services supported collection of charge shall be imposed on consumers; and

(v) charge shall not be collected by adding it together with the food bill and levying GST on the whole amount.

The consumer has four options at different levels of escalation just in case she spots the levy of charge in her bill.

First, she will be able to make missive of invitation to the hotel or restaurant to get rid of the charge from her bill.

Second, she will lodge a complaint on the National Consumer Helpline (NCH), which works as an alternate dispute redressal mechanism at the pre-litigation level. The complaint is lodged by making a appeal the amount 1915, or on the NCH mobile app.

Third, the buyer can complain to the buyer Commission, or through the edaakhil portal, http://www.edaakhil.nic.in.

Fourth, she will submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings by the CCPA. A consumer can complain on to the CCPA by sending an e-mail to [email protected].

The CCPA took cognizance of grievances regarding restaurants and hotels levying charge by default, without first asking or informing consumers.

The CCPA has issued guidelines under Section 18 (2) (I) of the patron Protection Act, 2019.

Last month, the govt called a gathering with the National Restaurant Association of India (NRAI), saying it had received an increasing number of complaints from consumers that they were still being "forced to pay service charges, often fixed at arbitrarily high rates" which "they are harassed if they request to get rid of it from the bill".

The NRAI, which represents over half 1,000,000 restaurants, had defended the practice, saying it absolutely was a "matter of individual policy" and levying such a charge wasn't "illegal".

They also argued that the charge brought additional revenue to the govt. too since restaurants paid a tax on what they charged customers.

The new guidelines say that buyers can lodge their complains online or through the National Consumer Helpline.

The guidelines are additionally to the Centre’s 2017 guidelines which prohibit the levy of service fee on consumers by hotels and restaurants, and terms the charging for all the world apart from “the prices displayed on the menu card together with the applicable taxes” without “express consent” of the customer as “unfair trade practices”.

The difference between the new guidelines issued by CCPA and therefore the previous guidelines by the Department of Consumer Affairs is that, within the intervening period, the erstwhile Consumer Protection Act, 1986 was replaced with the buyer Protection Act 2019, which came into effect in July 2020. It created a replacement statutory body i.e., the Central Consumer Protection Authority, which has been empowered by the Parliament to require cognisance of the unfair trade practices. Therefore, any violation of the rules are viewed seriously and appropriate action are taken for unfair trade practice and violating the rights of consumers.