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Service charge: Delhi High Court issues notice to restaurants body on CCPA plea

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The Delhi High Court on Thursday issued notice to restaurants bodies, including The Federation of Hotel and Restaurant Associations of India (FHRI) and the National Restaurant Association of India (NHRI), on an appeal filed by the Central Consumer Protection Authority (CCPA) regarding service charge levied by the restaurants in the national capital.

The Single-Judge Bench of Yashwant Varma permitted the city restaurants to continue levying service charge till next hearing, which is on August 31.

Stating that it was an important issue for the consumers, CCPA, which comes under the Ministry of Consumer Affairs, had filed an appeal in the High Court, challenging its July 20 order that stayed the Authority’s new guidelines restraining restaurants from adding service charge by default to food bills.

The Authority had issued guidelines to prevent unfair trade practices and violation of consumer rights with regard to the hotels and restaurants levying service charge, stating that the consumer may lodge a complaint with the National Consumer Helpline (NCH) against such practice.

The National Restaurant Association of India (NRAI) challenged these guidelines in the High Court, which stayed the same.

Justice Yashwant Varma, during the previous hearing, had directed the restaurants to display the information regarding Service Charge being levied on menu cards and otherwise also, so that the customers are aware of this charge.

The High Court further said that the Service Charge cannot be levied on any takeaway orders.

Additional Solicitor General Chetan Sharma represented the Central Consumer Protection Authority, while Senior Advocate Kapil Sibal appeared for the restaurant bodies.

Sibal said eateries across the world levied service charges.

The Union Ministry of Consumer Affairs, Food and Public Distribution, in June, 2022, had asked the eatery associations to stop levying service charges in their bills compulsorily, calling it illegal. The ministry had further said that it will come out with a legal framework to end this practice.

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