The Centre had earlier objected to the imposition of “service charges” on hotel-restaurant meals as well as separate charges for services. The law has not yet been sealed, but the Central Consumer Protection Authority (CCPA) said on Monday in guidelines that hotels and restaurants would not be able to charge in any way, and if anyone did, buyers would be able to complain to the National Consumer Helpline (NCH).
According to the guidelines of the day, if a customer is charged money for service charge or service, the buyer can complain by calling NCH’s helpline number (1915) or through mobile app. There will also be an opportunity to complain to the Buyer Commission, District Magistrate or CCPA.
The central government later said in a statement that the Consumer Protection Authority had issued guidelines to curb these unethical claims and violations of consumer rights in the hotel-restaurant business. Accordingly, no one can compulsorily take service charge on food bill. GST also cannot be levied on that money bill. Because it is absolutely voluntary, that is, whether to give or not depends entirely on the decision of the buyer. On this basis, no guest can be denied access to the hotel or restaurant. A section of the concerned quarters claimed that now the market usually charges 10% service charge on the food bill.
About a month ago, Piyush Goyal, the Modi government’s consumer protection minister, had objected to the hotel-restaurants charging for food bills. This time, after the publication of CCPA’s guidelines, which speak to the general public about the complaints and the Centre’s statement explaining the matter, it is clear that strict action is being taken on service charges. According to CCPA, many buyers had earlier complained to the NCH about the imposition of service charges. They complained that many restaurants compulsorily added the money to their food bills. Whether or not to give it depends on the will of the buyer was also kept hidden. On the contrary, if someone does not want to give it, she becomes a victim of harassment and mistreatment.
Statement of Hotel Association
The impact of the new guidelines is far-reaching, said Gurbaxish Singh Kohli, vice-president of the Federation of Hotel and Restaurant Associations of India (FHRAI) and joint secretary Pradeep Shetty. The claim of these officials of the organization of hotel-restaurants is that it is a guideline, not a law. However, the industry complies with most of the guidelines. There is no compulsion or coercion in the service sector. No buyer or guest is returned if they refuse to pay. Although they have complained that many other industries have taken such charges, the ban is being imposed only on them.
Earlier, the hospitality industry had said that in many cases, various charges were levied as ‘airport charges’ or ‘usage fees’. There is no concealment, they said, and the process of taking service charge is very transparent. They added that actions should be taken to impose such restrictions on all businesses, not just hotels and restaurants.