UditVani, Jamshedpur: For a long time, most of us thought that the service charge (added automatically or by default in hotel & restaurant bills) is being taken by the government. A Consumers think that service charge is like a service tax.
Consumer doesn’t know the difference between service tax, GST etc. because people think it is being taken by the government. On July 4, 2022, the Central Consumer Protection Authority (CCPA) issued certain guidelines to prevent the violation of consumer rights in hotels and restaurants.
These guidelines state that the service charge in restaurants and hotels is illegal and cannot be levied automatically or by default in the food bills. When you visit a restaurant, if you are forced to pay a service charge, you have multiple ways to file a complaint against this practice.
The guidelines issued by CCPA include:
# No hotel or restaurant shall add service charge automatically or by default in the bill.
# Service charge shall not be collected from consumers by any other name.
# No hotel or restaurant shall force a consumer to pay service charge and shall clearly inform the consumer that service charge is voluntary, optional and at consumer’s discretion.
# No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers.
# Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
The National Restaurant Association of India (NRAI) and Federation of Hotels and Restaurant Associations of India had filed petition in Delhi HC challenging the CCPA guidelines.
The counsel for Restaurants had argued that the issue of levying service charge was not merely like giving a “tip” and that it pertained to an industry practice governed by the right to business under Article 19(1)(g) of the Constitution and that it has been going on for more than 70 years.
Delhi HC in its Order dated 12th April, 2023, the Court had directed that:-
(i) Both the associations shall file a complete list of all their members who are supporting the present writ petitions by 30th April 2023
(ii) Both the associations shall place their stand and file a specific affidavit on the following aspects:-
(a) Percentage of members who impose service charge as a mandatory condition in their bills
(b) Whether the associations shall have objection in the term service charge being replaced with alternative terminology so as to prevent confusion in the minds of the consumer that the same is not a Government levy such as ‘Staff welfare fund’, ‘Staff welfare contribution’, ‘Staff charges’, ‘Staff welfare charges’, etc.
(c) Percentage of members who are willing to make service charge as voluntary and not mandatory, with option being given to the consumers to make their contribution to the extent that they are voluntarily willing subject to a maximum percentage that may be charged.
The restaurant associations were required to do necessary compliance as per the above-mentioned directions. However, neither of the associations filed the affidavits in terms of the said order.
Rs 1,00,000 each as costs for non-compliance:
The Delhi High Court has now passed Order on directing the National Restaurant Association of India (NRAI) and the Federation of Hotel & Restaurant Associations of India (FHRAI) to pay Rs 1,00,000 each as costs for complete non-compliance of the directions as per its order dated 12th April, 2023. It may be mentioned that a number of consumers have complained against forceful collection of service charge on the National Consumer Helpline (NCH).
The Court has directed that the costs shall be paid to the Department of Consumer Affairs, Government of India.
The Court noted that the clear impression that it gets is that the restaurant associations are in complete non-compliance of the orders dated 12th April, 2023 and had filed the affidavits without serving the respondents properly so as to ensure that the hearing does not proceed before the Court.
The Court granted one last opportunity to properly file these affidavits within 4 days subject to payment of Rs.1,00,000/- as costs in each of the petitions which shall be paid to the the Department of Consumer Affairs by way of a Demand Draft. Non-compliance with this direction will result in the affidavits not being taken on record. The matter is now scheduled for hearing on 5th September, 2023.
More than 4,000 complaints registered:
A number of consumers have complained against forceful collection of service charge on the National Consumer Helpline (NCH). Since the guidelines issued by the Central Consumer Protection Authority (CCPA) in July, 2022, more than 4,000 complaints have been registered highlighting:
a. Forcing consumers to pay service charge involuntarily even when they are dissatisfied with the service provided by the restaurant/hotel
b. Making payment of service charge mandatory
c. Portraying service charge as a charge which is levied by or has the approval of the government
d. Embarrassing and harassing consumers including by bouncers in case they resist paying service charge
e. Charging exorbitant amount of money in the name of such charge as 15%, 14% etc.
f. Service charge has also been collected by disguising it by other names such as ‘S/C.’, ‘SC’, ‘S.C.R.’ or ‘S. CHARGE’ etc.
उदित वाणी 
टेलीग्राम पर भी उपलब्ध है। यहां क्लिक करके आप सब्सक्राइब कर सकते हैं।