Restaurants can't force service charge on users

NEW DELHI: The Union government issued new guidelines on Monday to deem it illegal for restaurant and hotels to levy a service charge without the express consent of a diner, according to a statement by the ministry of consumer affairs, which also specified government helplines where customers can report violations.

The levy has been in contention for years now. In June, the government held a meeting with restaurant lobby and consumer rights groups, following which the ministry said on June 2 that it will draw up a new framework to bar services charges altogether.

The announcement on Monday now gives an enforceable shape to the government's directions on the matter: the practice of levying service charges by default has now been defined as an unfair trade practice by the Central Consumer Protection Authority (CCPA), a regulatory body set up in 2019.

"The guidelines issued by CCPA stipulate that hotels or restaurant shall not add service charge automatically or by default in the food bill. No collection of service charge shall be done by any other name. 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 consumer's discretion," the government statement said.