CCPA to challenge HC order staying norms on service charge levy

On July 20, a single-judge bench of the Delhi HC stayed the guidelines issued by CCPA on the levy of service charge by restaurants and hotels.

CCPA to challenge HC order staying norms on service charge levy
In his order, Justice Yashwant Varma said restaurants and hotels which levy such a charge should mention it prominently on their menu cards.

The Central Consumer Protection Authority (CCPA) will challenge the order of a single-judge bench of the Delhi High Court which had stayed the guidelines issued by the Centre prohibiting restaurants and hotels from levying service charges on food bills.

Sources told FE that CCPA, which comes under the ministry of consumer affairs, is expected to file its review petition shortly.

On July 20, a single-judge bench of the Delhi HC stayed the guidelines issued by CCPA on the levy of service charge by restaurants and hotels. The order was passed on a plea by the National Restaurant Association of India (NRAI), which claims to represent over 500,000 restaurants.

In his order, Justice Yashwant Varma said restaurants and hotels which levy such a charge should mention it prominently on their menu cards. The court also recorded an undertaking by restaurants that there will be no service charge on takeaway food orders.

The CCPA issued guidelines on July 5 barring restaurants and hotels from levying service charge automatically or by default on food bills and allowed customers to file complaints in case of violation. It also issued directions for preventing unfair trade practices and violation of consumer rights about levying of service charges.

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