UT warns hotels, restaurants against adding service charges

UT department of food and supplies states that it has been noticed that some restaurants and hotels are levying service charge in the bill by default, without informing consumers that paying such charge is voluntary and optional

The UT department of food and supplies and consumer affairs and legal metrology has issued an advisory in public interest to hotels and restaurants that no hotel or restaurant shall add service charge automatically or by default in the bill.

The department informed the general public that if any consumer finds a hotel or restaurant that is levying service charge in violation to the mentioned guidelines, a consumer may make a request to the concerned hotel or restaurant to remove service charge from the bill amount (HT File Photo for representation)

The department states that it has been noticed that some restaurants and hotels are levying service charge in the bill by default, without informing consumers that paying such charge is voluntary and optional. Service charge is being levied in addition to the total price of the food items mentioned in the menu and applicable taxes, often in the guise of some other fee or charge.

‘Consumers mistake service charge for tax’

Further, the department has also noticed that some customers have been paying tips to waiters, in addition to service charges, under the mistaken impression that service charge is a part of taxes. As per the guidelines issued by Central Consumer Protection Authority (CCPA), service charge cannot be added in the bill involuntarily, without allowing consumers the choice or discretion to decide whether they want to pay such charge or not.

The department states that “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, adds the department.

The department informed the general public that if any consumer finds a hotel or restaurant that is levying service charge in violation to the mentioned guidelines, a consumer may make a request to the concerned hotel or restaurant to remove service charge from the bill amount. Lodge a complaint on the consumer helpline, which works as an alternate dispute redressal mechanism at the pre-litigation level by calling 1915 or through WhatsApp number 8800001915 or through the NCH mobile app.

Complaints can also be filed digitally at www.e-jagriti.gov.in for their speedy and effective redressal and submit a complaint to the CCPA by e-mail at com-ccpa@nic.in. Consumer can also send a complaint to the department by calling their helpline number 0172-2703956 or sending an email at fcs-chd@nic.in.