Hotels, Restaurants cannot deny entry or service based on service charge

Eateries will have to clearly inform consumers that service charge is voluntary, optional and at consumer’s discretion and they can also not restrict entry or deny services based on collection of service charge, according to the new guidelines issued by Central Consumer Protection Authority (CCPA) for preventing unfair trade practices and violation of consumer rights with regard to levying of service charge in hotels and restaurants.

"Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount," the new guidelines issued on Monday said.

The Department of Consumer Affairs (DoCA) had earlier in May slammed restaurants for levying service charge, following complaints by consumers. The restaurants had argued that service charges are mentioned on the food menu and hence, the customer is informed while he places an order. Following a meeting with industry associations, the DoCA had said that it will formulate new guidelines to keep service charges voluntary.


If any consumer finds that a hotel or restaurant is levying service charge in violation to the guidelines, a consumer may make a request to the concerned hotel or restaurant to remove service charge from the bill amount. Also, the consumer may lodge a complaint on the National Consumer Helpline (NCH), the guidelines state. Complaints can also be filed electronically through the e-daakhil portal.

A number of complaints have been registered in the National Consumer Helpline (NCH) by consumers with regard to levying of service charge with issues such as restaurants making service charge compulsory and adding it in the bill by default, suppressing that paying such charge is optional and voluntary and embarrassing consumers in case they resist paying service charge.