The Delhi high court on Friday upheld the guidelines issued by the Central Consumer Protection Authority (CCPA), prohibiting hotels and restaurants from automatically levying a’service charge’ on food bills.
The guidelines were issued in July 2022 for preventing unfair trade practices and violation of consumer rights concerning levying service charges.
The high court said that the imposition of a service charge in a mandatory manner is “violative of consumer rights and the collection of service charge in various names amounts to unfair trade practices.”
“The registrants should not add the service charge mandatorily but must leave it to the consumer’s discretion,” the court added.
Justice Prathiba M Singh pronounced the judgement and dismissed petitions of restaurant bodies challenging CCPA guidelines prohibiting hotels and restaurants from levying mandatory service charges on food bills.
According to a PTI report, the Federation of Hotels and Restaurant Associations of India (FHRAI) and National Restaurant Association of India moved court in 2022 by filing two separate petitions.
The guidelines, issued by Central Consumer Protection Authority on July 4, 2022, were stayed by the high court later that month.
On March 9, the FHRAI pitched for delinking the GST on food & beverage services from accommodation charges in hotels, PTI reported.
