Restaurants explore ways to challenge service charge guidelines and can go the legal route

New Delhi: The hospitality industry is actively considering challenging the Central Consumer Protection Authority (CCPA) ruling prohibiting hotels and restaurants from automatically or default levying service charges on food bills.
The National Restaurants Association of India, or NRAI, is weighing legal options to challenge the new service charge guidelines, an administrator for the industry body has said. HEY.
“The guidelines state that we must obtain consent from customers before charging a service fee. Our position is that if we have informed the customer that we take a service charge from the menu and put it on signs outside, that is already deemed consent,” quoted financial daily Anurag Katriar, administrator of the NRAI and managing director of Indigo Hospitality, as said. NRAI represents the interests of more than 500,000 restaurants, including fast food, tea and coffee chains, bars and delivery-only players.

Citing an unnamed Department of Consumer Affairs (DoCA) official, the publication mentions that the standards do not provide for “presumed consent”. “This is already covered in point 7(3) of the CCPA (Central Consumer Protection Authority) guidelines. There is no such thing as ‘deemed consent’,” the official told the daily on condition of anonymity.

Going further, Katriar said restaurateurs “don’t know how to get customer consent, that there’s a form or a set procedure.”

Additionally, hospitality industry associations want clarification from the Center on the guidelines. Pradeep Shetty, secretary of the Federation of Hotel and Restaurant Associations of India (FHRAI), told the daily: “We may contact the CCPA for clarification. This is a new set of guidelines issued by the CCAC and not a new law.

He, however, mentioned that the industry expected a rule that would impose restrictions on the collection of fees across all industries, adding that according to the latest guidelines, it appears that the limits imposed are only valid for the hotel sector. No one was forced to pay the service fee and no consumer was fired if they refused to pay it, he added.

To recap, in a serious attempt to prevent unfair business practices and the violation of consumer rights with respect to the collection of service charges in hotels and restaurants, the CCPA guidelines state that hotels or restaurants should not should not add a service charge automatically or by default to the food bill. , according to a statement from the Ministry of Consumer Affairs, Food and Public Distribution.

No collection of service fees will be made by any other name. Additionally, no hotel or restaurant should force a consumer to pay a service charge and should clearly inform the consumer that the service charge is voluntary, optional, and at the consumer’s discretion.


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