Central Consumer Protection Authority: CCPA Order on Service Charges levied by Hotels

CCPA order on Service Charges- Relevance for UPSC Exam

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CCPA order on Service Charges in News

Recently, Central Consumer Protection Authority (CCPA) issued guidelines asking hotels and restaurants not to collect service charge from customers.

CCPA Guidelines on Hotel Service Charges

The Central Consumer Protection Authority (CCPA) guidelines say that these establishments should not add service charge automatically or by default to the food bill paid by customers.
- Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
CCPA guidelines adds that if any consumer finds that a hotel or restaurant is violating the guidelines, he or she may-
- Make a request to remove the service charge from the bill amount or
- Lodge a complaint with the National Consumer Helpline.
Complaints against such malpractices can be filed with the Consumer Commission too or with the District Collector.
The guidelines added that component of service is inherent in the price of food and beverages offered by the restaurant or hotel.

Central Consumer Protection Authority (CCPA)

About: Central Consumer Protection Authority (CCPA) has been constituted under Section 10(1) of The Consumer Protection Act, 2019.
- The Consumer Protection Act, 2019 has come into force from 20^thJuly, 2020. As provided in section 10 of the Act, the Central Consumer Protection Authority (CCPA) has been established w.e.f. 24^th
About Consumer Protection Act, 2019: The Act replaced The Consumer Protection Act, 1986, and seeks to widen its scope in addressing consumer concerns.
- The new Act recognises offences such as providing false information regarding the quality or quantity of a good or service, and misleading advertisements.
- It also specifies action to be taken if goods and services are found “dangerous, hazardous or unsafe”.
Mandate: The CCPA aims to protect the rights of the consumer by cracking down on unfair trade practices, and false and misleading advertisements that are detrimental to the interests of the public and consumers.
- The objective of the Central Consumer Protection Authority (CCPA) is to promote, protect and enforce the rights of consumers as a class.
Powers: The CCPA will have the powers to inquire or investigate into matters relating to violations of consumer rights or unfair trade practices suo motu, or on a complaint received, or on a direction from the central government.
Key functions: Central Consumer Protection Authority (CCPA) will be empowered to-
- Conduct investigations into violation of consumer rights and institute complaints / prosecution,
- Order recall of unsafe goods and services,
- Order discontinuation of unfair trade practices and misleading advertisements,
- Impose penalties on manufacturers/endorsers/publishers of misleading advertisements.