The Centre on Wednesday directed hotels and restaurants to refrain from adding extra charges to food bills under labels such as “LPG charges” or “gas surcharge”, emphasizing that such costs should be included in the listed menu prices.
Calling the practice an attempt to bypass existing service charge guidelines, the Central Consumer Protection Authority (CCPA) — the country’s apex consumer watchdog — issued an advisory aimed at curbing what it described as unfair trade practices.
“It has come to the notice of the CCPA, through grievance registered on the National Consumer Helpline (NCH), complaints and media reports, that restaurants and hotels are levying additional charges in the name of ‘LPG charges’, ‘gas surcharge’, ‘fuel cost recovery’, ‘gas crisis charges’ or similar terminology in the bill by default. Further, such charge is being levied in addition to the total price of the food items mentioned in the menu and applicable taxes,” stated the advisory issued by CCPA Chief Commissioner Nidhi Khare.
“No hotel or restaurant shall levy ‘LPG charges’, ‘gas surcharge’, ‘fuel cost recovery’, ‘gas crisis charge’ or any similar charge by default or automatically in the bill,” the CCPA said.
“Hotels and restaurants shall ensure that the price displayed in the menu is the final price, exclusive only of applicable taxes,” it added.
“It is reiterated that input costs, including fuel, LPG, electricity, or other operational expenses, are part of the cost of running the business, and must be appropriately factored into the pricing of menu items,” the advisory stated.
The authority further noted that recovering such expenses through separate mandatory charges imposed on customers constitutes an unfair trade practice under Section 2 (47) of the Consumer Protection Act, 2019.
“Further, levying such charges under different nomenclature is an attempt to circumvent the existing guidelines on service charge, which explicitly prohibit collection of any additional charge by default or under any other name,” the CCPA advisory said.
“Such charges, irrespective of the nomenclature used, are in the nature of a service charge or any other additional fee collected over and above the price of food and beverages. Accordingly, levy of ‘LPG charges’, ‘gas surcharge’, ‘fuel cost recovery’, ‘gas crisis charge’ or similar charges by default shall be treated as a violation of the CCPA Guidelines dated 04.07.2022 on service charge. Any non-compliance in this regard may attract action under the provisions of the Consumer Protection Act, 2019,” it added.