Centre warns restaurants against levying unlawful service charges
What's the story
The Indian government has warned hotels and restaurants against levying automatic service charges on customers' bills. The Department of Consumer Affairs said this practice is illegal under the Delhi High Court's ruling and Central Consumer Protection Authority (CCPA) guidelines. Nidhi Khare, Secretary of the Department of Consumer Affairs, said they have received numerous complaints from consumers regarding this issue.
Legal backing
Action will be taken against violators: Khare
Khare referred to the Delhi High Court's ruling that action will be taken against restaurants and hotels that impose mandatory service charges.
She clarified that the issue arises when a service charge is automatically included in the bill, something she believes is "settled" after last year's judgment.
The court had dismissed petitions by the National Restaurant Association of India and the Federation of Hotels and Restaurant Associations of India challenging CCPA guidelines.
Regulatory action
'Chaayos' was fined ₹50,000 by CCPA
The CCPA, which Khare heads, recently fined 'Chaayos' ₹50,000 for calling the service charge voluntary while adding it automatically to the bill.
The authority has also taken action against several other Delhi restaurants for not refunding this charge.
Under its 2022 guidelines, bars, hotels, and restaurants are prohibited from levying a service charge by default and must inform all paying customers that such payment is optional.