Centre Asks States to Look into Service Charges Levied by Hotels

Hotels will also be asked to disseminate proper information through display boards at appropriate places.

The government received complaints that consumers are being forced to pay 5-20 percent service charge irrespective of the kind of service provided to them. (Photo: iStock)

The Department of Consumer Affairs has issued an advisory to the state governments to sensitize companies, hotels and restaurants, within their jurisdiction, regarding the provisions of Consumer Protection Act on unfair trade practices.

It also asked the states to advise them to disseminate proper information through display boards at appropriate places, said CR Chaudhary, Minister of State for Consumer Affairs, Food and Public Distribution, in a written reply to a Lok Sabha question on Tuesday.

According to the ministry, the government has received a number of complaints from consumers, through the National Consumer Helpline, who claim that some hotels and restaurants have been levying service charge at the rate of 5-20 percent on the bills of food and beverages in lieu of tips which a consumer is forced to pay, irrespective of the kind of service provided to them.

The Department of Consumer Affairs has examined the matter and issued advisory to the state governments to sensitize the companies, hotels and restaurants in the states regarding the provisions of the Consumer Protection Act, 1986 on unfair trade practices.

A Ministry Statement

It further added:

It was also told advise the hotels/ restaurants to disseminate information through display at appropriate places in hotels/ restaurants that the ‘service charges’ are discretionary/ voluntary and that a consumer dissatisfied with the services can have it waived off.

The Consumer Protection Act, 1986 provides that a trade practice, which for the purpose of promoting sale, use or supply of goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice.