The new guidelines to prevent unfair trade practices

The Central Consumer Protection Authority (CCPA) has announced five guidelines to prevent unfair trade practices and to protect consumer interests regarding the levy of service charges in hotels and restaurants.
The guidelines are in addition to the Centre’s 2017 guidelines which prohibit the levy of service charges on consumers by hotels and restaurants, and terms the charging for anything other than the prices displayed on the menu card along with the applicable taxes without express consent of the customer as unfair trade practices.

The CCPA has been established to regulate matters related to the violation of the rights of consumers. Under the Consumer Protection Act (CPA), 2019, the authority was established to regulate violations of consumer rights, unfair trade practices, and false or misleading advertisements that are prejudicial to the interest of the public.
The CCPA has authority to protect, promote and most importantly enforce the rights of the consumers and prevent violation of their rights under the Act.
It also seeks to ensure that no person engages in unfair trade practices. It is also empowered to issue guidelines to enforce the rights of the consumers laid down in the Act.
The authority has issued a letter to the Chief Secretaries of the States on service charge imposition, asking them to ensure compliance with the new guidelines on service charges. It has also been said that the State should instruct all the district magistrates to take appropriate action against violations of the guideline.

A service charge is a tip or a direct transaction between the customer and the restaurant staff, specifically the wait staff. It is a fee collected to pay for services associated with the purchase of a primary product or service. It is collected by hospitality sectors and food and beverage industries as a fee for serving customers.

As per the new guidelines, hotels or restaurants are prohibited from levying extra charges automatically or by default in the bill or by any other name. Also, they are not allowed to force service charges, and must clearly inform the consumers that service charges are voluntary, optional, and at their discretion.
Most importantly, hotels and restaurants are no longer allowed to restrict entry or services based on the collection of service charges. Furthermore, hotels cannot add service charges to their bills and charge GST on the total.
It is entirely up to the consumer to decide whether or not to tip. If a consumer enters a restaurant or orders something, the restaurant policy cannot require them to tip. Therefore, consumers cannot be forced to pay a service charge without having the choice to decide whether they want to do so.
If any consumer finds that a hotel or restaurant is levying a service charge in violation of these guidelines, they may lodge a complaint on the NCH by calling 1915 or through the NCH mobile app. A complaint may also be filed through edaakhil.nic.in. for effective redressal.

Reference

Today Current Affairs Upsc Exam Syllabus & Previous Yearpaper.