Service charge at restaurants: Consumer protection regulator to contest Delhi HC's stay order

Consumer protection regulator CCPA on Tuesday said it will challenge the Delhi High Court's decision to stay the recent guidelines issued by the government, prohibiting restaurants and hotels from levying service charges automatically on food bills.

Central Consumer Protection Authority (CCPA) Chief Commissioner Nidhi Khare said the court has stayed the guidelines of July 4, 2022, related to service charges, and the matter is listed for further hearing on November 25.

"We are going to challenge before that. We are examining and will take appropriate steps so that we are heard," Khare told reporters.

Hearing a petition filed by the National Restaurant Association of India (NRAI) and Federation and Restaurant Associations of India that challenged the CCPA's July 4 guidelines, the Delhi High Court on July 20 ordered a stay on it.

Justice Yashwant Varma, while hearing the petition, had said the issue requires consideration and directed the CCPA to file its reply and listed the matter for further hearing on November 25.

The July 4 guidelines issued by CCPA barred hotels and restaurants from levying service charges automatically or by default in food bills and allowed customers to file complaints in case of violation.

Restaurants and hotels generally levy a service charge of 10 percent on the food bill. The guidelines said there should not be any collection of service charges by any other name.