The Department of Food & Supplies and Consumer Affairs and Legal Metrology, U.T., Chandigarh has issued an advisory addressing the automatic levying of service charges by hotels and restaurants.

Key Points of the Advisory

1. Automatic Service Charges: The advisory highlights that many restaurants and hotels are automatically adding service charges to customer bills without informing them that these charges are optional. This practice can mislead consumers into thinking that they are mandatory.
2. Consumer Rights: According to the guidelines issued by the Central Consumer Protection Authority (CCPA), consumers have the right to choose whether or not to pay a service charge. The advisory emphasizes that establishments must clearly inform customers about this choice.
3. Impact on Consumers: Many customers mistakenly believe that service charges are part of taxes, leading them to pay additional tips on top of these charges. This can create confusion and result in consumers paying more than they intended.
4. Compliance Requirement: The advisory mandates that no hotel or restaurant should automatically include service charges in their bills. They must inform customers that these charges are voluntary and cannot impose any restrictions on service based on whether a consumer pays the service charge.
5. Complaint Mechanism: The advisory provides guidance for consumers who encounter violations of these guidelines. It encourages them to request the removal of service charges from their bills and outlines various ways to lodge complaints if establishments do not comply.

Impact:

The advisory serves to protect consumer rights by ensuring transparency in billing practices within the hospitality industry. It aims to prevent unfair trade practices and empower consumers with the knowledge that they can refuse to pay service charges if they choose to do so. The document seeks to create a fairer dining experience for customers by clarifying their rights and providing mechanisms for redressal in case of violations.

This practice often occurs without informing consumers that paying such charges is voluntary. The advisory aligns with guidelines from the Central Consumer Protection Authority (CCPA), which stipulate that service charges cannot be added to bills by default and must be clearly communicated as optional. Consumers are advised to request the removal of service charges if they appear on their bills and can lodge complaints through various channels if establishments fail to comply with these regulations.