Rs 1L penalty on Shangri-La for service charge
The Central Consumer Protection Authority has fined a Delhi hotel Rs 1 lakh for the illegal and automatic inclusion of a service charge on food bills. The authority ruled that forcing consumers to opt out of such charges constitutes an unfair trade practice.
Why it matters
This ruling reinforces consumer rights regarding transparency in billing and sets a precedent for how hospitality businesses handle discretionary service fees.
NEW DELHI: Central Consumer Protection Authority (CCPA) has imposed a penalty of Rs 1 lakh on Delhi's Shangri-La Eros hotel for illegally levying a 10% service charge on food bills at its "Mister Chai" restaurant. It has also directed the restaurant to "discontinue and refrain from collecting any charge automatically or by default or under any other name".The order, passed last week, noted that the hotel had submitted to the authority in late September that it was discontinuing the practice from Oct 1.The order, passed by CCPA chief commissioner Nidhi Khare and commissioner Anupam Mishra, detailed how the restaurant had automatically added service charge to bills - Rs 435 on a subtotal of Rs 4,350 and Rs 125 on a subtotal of Rs 1,250 - and subsequently levied GST on the inflated amounts.
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