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Bengaluru hotels have mixed reactions over ‘unfair’ tag for service charge

Although consumers so far had a choice to pay service charge, hotels can no longer include them in their bills by default
Last Updated 05 July 2022, 02:54 IST

The Central Consumer Protection Authority’s (CCPA) decision to categorise collecting service charges as an unfair practice has evoked mixed reactions among members of the Bengaluru hoteliers’ association.

Although consumers so far had a choice to pay service charge, hotels can no longer include them in their bills by default.

Representatives of the National Hotels Association of India told DH that they will take a legal opinion on the guidelines.

“The guidelines are similar to the ones issued in 2017. We levy a service charge now and are open to removing it if the customer demands it. The new guidelines also do not make it illegal to levy a service charge if the customer is ready to pay. Hence, we will take a legal opinion and go ahead,” said Mukesh, President of the National Hotels Association of India.

Bruhat Bengaluru Hoteliers Association (BBHA) President P C Rao has welcomed the order. "Only about 20% of the restaurants in the city were levying these charges. The association believes that the consumers should not be burdened in any way. Hence, we welcome the decision,” he said.

He also added that consumers could still tip the waiters if they are happy with their services.

In an official statement, the BBHA said: "We welcome the new guidelines issued by CCPA. As per the guidelines, no hotelier can charge a service charge other than the food bill and GST. We are also in the opinion that this additional burden on our customers is not required, though a major part of this charge goes to our staff.”

“In the olden days and now also in many hotels, customer themselves give tips to the staff on their own,” the statement continued. “Compulsory collecting service charge is mentioned as unfair trade practices. To protect consumer interest on behalf of our hotel owners, we welcome this decision and also advise all our members to do the needful.”

Girish, who owns a restaurant in Jayanagar, said service charges collected by the restaurant is being distributed among cleaners and cooks.

“Waiters are tipped by patrons, but the other staff are left out. The service charges we collect are usually distributed to them. Now that may have to stop,” Girish said.

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(Published 04 July 2022, 18:30 IST)

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