Service Charge By Hotels

The single-judge bench of the Delhi High Court recently ruled that the mandatory collection of service charges is unlawful and violates established guidelines

The Delhi High Court on Friday reserved its verdict on the petitions by restaurant bodies challenging the guidelines prohibiting hotels and restaurants from automatically levying service charge on food bills. "Arguments heard. Judgement reserved," said Justice Prathiba M Singh. Federation of Hotels and Restaurant Associations of India (FHRAI) and National Restaurant Association of India (NRAI) moved court in 2022 by filing two separate petitions. The guidelines, issued by Central Consumer Protection Authority (CCPA) on July 4, 2022, were stayed by the high court later that month. The counsel for FHRAI, in his rejoinder submissions on Friday, asserted the CCPA had no power or jurisdiction to impose such a ban, without following the principles of natural justice. "Merely holding a meeting with the industry body is not in compliance of natural justice," he said, "the guideline could only be advisory in nature". He said the service charge was levied on customers for the benefit of th

Despite the Central government's strict guidelines, hotels and restaurants continue to impose service charges under various pretences

Centre said that since the guidelines issued by the CCPA in July last year, more than 4,000 complaints have been registered on the National Consumer Helpline

Asks industry bodies to tell the court how many eateries are willing to inform consumers that service charge is not mandatory

The Delhi High Court questioned why restaurants should recover service charges from consumers as an additional and separate levy

Usually there is a marked difference between the charges promised and what we pay at the end of a service, whether at a restaurant or booking an air ticket. How can we ensure price transparency?

No such charge on takeaway orders: Court

The Delhi High Court on Wednesday stayed the recent guidelines prohibiting hotels and restaurants from levying service charge automatically on food bills

High food inflation forces restaurants to hike prices; ban on service charge will likely lead to further increases in the prices of dishes on the menu

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Upon receiving related complaints, the District Collector may conduct investigation pertaining to violation of the guidelines and submit the report to the authority within 15 days, said CCPA.

Amid rising complaints related to levying of service charge by hotels and restaurants, regulator CCPA has asked state chief secretaries to create awareness about the new guidelines

According to the NRAI, the government cannot bring about a change insofar as a levy of service charge is concerned by making guidelines

Eateries have been asked either to leave the column of service charge blank or mention on the bill that it is optional