Service charge on food bills: Govt asks states to implement CCPA guidelines in letter & spirit; eateries say may resort to price hike

After the CCPA (Central Consumer Protection Authority) issued guidelines for hotels and restaurants barring them from levying service charges on food bills by default, eateries may resort to price hike.

The owners of hotels & restaurants fear that the CCPA action can affect their business and bring down the footfall.   

To this, the government has said that eateries can increase the price marginally, but cannot charge service charges from the customers.

What does the recent Service Charge Update say?

The CCPA has issued a letter to the Chief Secretaries of the states on service charge imposition, strictly asking to ensure compliance with the new guidelines on service charges.

It was also stated in the letter that the state should give instructions to all the district magistrates and were asked to take appropriate action on violations of customer interest.

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Instructions were given for action under Consumer Protection Act on any personal/online complaints.

What are the preparations of the government under CCPA guidelines?

-For the government, protecting customer interest is paramount. The government is mapping plans to increase publicity regarding the new guidelines issued under CCPA.

-The government will apprise the customers of their rights at all points including on social media.

-Soon the new Mascot (Shubhankar) of 'Jago Grahak Jago' will also be seen spreading awareness for consumer awareness.

-The government clarified that the service charge will be at the discretion of the customer and cannot be added to the bill. Its recovery by any other name will also be considered wrong.

-The government will soon launch an action plan to monitor the pricing mechanism to prevent consumers from hiking prices.