The new guidelines against ‘service charge’

The new guidelines against ‘service charge’

Subject :Polity

Section : Rights

Context:

• CCPA has issued guidelines under Section 18 (2) (I) of The Consumer Protection Act, 2019.
• guidelines are in addition to the Centre’s 2017 guidelines which prohibit the levy of service charge on consumers by hotels and restaurants, and terms the charging for anything other than “the prices displayed on the menu card along with the applicable taxes” without “express consent” of the customer as “unfair trade practices”.
• CCPA has issued five major guidelines regarding the levy of service charge by restaurants and hotels, which has for long been a contentious issue and has periodically triggered complaints from consumers. The guidelines say:

(i) No hotel or restaurant shall add service charge automatically or by default in the bill;

(ii) Service charge shall not be collected from consumers by any other name;

(iii) 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 the consumer’s discretion;

(iv) No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers; and

(v) Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.

• The consumer has four options at different levels of escalation in case she spots the levy of service charge in her bill.
  • can make a request to the hotel or restaurant to remove the service charge from her bill.
  • can lodge a complaint on the National Consumer Helpline (NCH), which works as an alternative dispute redressal mechanism at the pre-litigation level. The complaint can be lodged by making a call on the number 1915, or on the NCH mobile app.
  • Edaakhil portal: through this can complain to the Consumer Commission, an initiative of Department of Consumer Affairs under the Ministry of Consumer Affairs, Food & Public Distribution
  • can submit a complaint to the District Collector of the concerned district for investigation and subsequent proceedings by the CCPA. A consumer can complain directly to the CCPA by sending an e-mail .
• Central Consumer Protection Authority
  • A statutory body,being constituted under Section 10(1) of The Consumer Protection Act, 2019.
  • To protect the rights of the consumer by cracking down on unfair trade practices, and false and misleading advertisements that are detrimental to the interests of the public and consumers.
  • It will be headquartered in the National Capital Region of Delhi but the central government may set up regional offices in other parts of the country.
  • Composition:
  • It will have a Chief Commissioner as head, and only two other commissioners as members — one of whom will deal with matters relating to goods while the other will look into cases relating to services.
  • The CCPA will have an Investigation Wing that will be headed by a Director General.
  • District Collectors too, will have the power to investigate complaints of violations of consumer rights, unfair trade practices, and false or misleading advertisements.