Restaurants are now banned from forcing customers to pay service charges
The order issued by the Central Consumer Protection Authority (CCPA) on July 4 noted that hotels and restaurants are banned from adding service charges by default in bills
The Indian government has issued an order forbidding hotels and restaurants from forcing customers to pay service charges as part of the food bill.
The statement read, “No hotels or restaurants shall add service charge automatically or by default in the bill (sic).” It added that there should be no service charge collection by any other name. “No restriction on entry or provision of services based on a collection of service charge shall be imposed on consumers (sic),” the order noted.
The order issued by the Central Consumer Protection Authority (CCPA) on July 4 noted that hotels and restaurants are banned from adding service charges by default in bills. The Consumer Affairs Ministry issued the guidelines after a rise in consumer complaints about restaurants charging a forced tip.
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Incidentally, the Ministry of Consumer Affairs had asked restaurants and hotels not to include any service charge in bills much earlier. However, the rule was not followed up or implemented since no clear guidelines were sent out after that. The National Restaurant Association of India (NRAI) argued in response to the newly-introduced rule that a service charge was “legal” until the government formed a legal framework.
Now, consumers have the right to lodge a complaint on the National Consumer Helpline (NCH) if they are charged any service fee. Consumers can also submit a complaint online through the e-daakhil portal.
However, consumers can tip the staff or pay service fees by choice.