The Central Consumer Protection Authority (CCPA), has been established under the Consumer Protection Act, 2019 to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interest of public and consumers and to promote and enforce the rights of consumers as a class.

Who all are the consumers under act?

Consumer as defined under section 2(7) of the Consumer Protection Act 2019, is any person who buys goods and services for consideration and utilize such for personal or resale or commercial use. Thus by nature of its definition consumer covers absolutely every person availing services or goods for consideration.

To further specify person visiting hotels or restaurants and availing goods and services, incidental to, are also covered under the definition of consumer.

Notification of April 2017 –  On 21^st April 2017 Ministry of Consumer Affairs, Food and Public Distribution published  following guidelines on their website regarding service charges.

1. The consumer is liable to pay for the price given on menu card along with taxes. Charging anything else from this without consent of consumer would amount to unfair trade practice.
2. Price of the product covered the cost of goods as well as cost of service.
3. It is totally upon the consumer whether to pay the tip or gratuity, it is also after completing his or her meal. Also forcing a consumer to pay service charge as condition precedent to placing order fall under restrictive trade practices.
4. Bill may show clearly that service charge is voluntary and service charge column may be left blank for the consumer to fill before payment.
5. Consumer can exercise his/her rights to be heard and redressed under provisions of Consumer Protection Act, in case of restrictive or unfair trade practice and can approach a Consumer Dispute Redressal Commission/Forum.

Continuation of unfair practice in Hotels/Restaurants: 

Amid rising consumer complaints on the National Consumer Helpline that restaurants and hotels are levying service charge in the bill by default, without informing consumers that paying such charge is voluntary and optional as notified by guidelines of 2017 via Notification no –No. J – 24/9/2014 – CPU(pt.).

Therefore, to prevent unfair trade practices and protect consumer interest with regard to levying of service charge, the CCPA issues the following guidelines on 4^th July 2022 as in addition to the guidelines of 21st April, 2017.

Notification of July 2022 – On 4^th July 2022 The Central Consumer Protection Authority (CCPA) issued the necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

• 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.

Remedies available to consumers facing unfair practices:

• Make a request to the concerned hotel or restaurant to remove service charge from the bill amount.
• Lodge a complaint on the National Consumer Helpline (NCH), by calling 1915 or NCH mobile app.
• The Complaint can also be filed electronically through edaakhil portal edaakhil.nic.
• Submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings.
• The complaint may also be sent to the CCPA by e-mail at com-ccpa@nic.in

Click here For Complete Guidelines of Notification dated 21^st April, 2017

Click here For Complete Guidelines of Notification dated 4^th July, 2022

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