CCPA issues advisory to prevent unfair trade practices by hotels after West Asia conflict

The Central Consumer Protection Authority (CCPA) has taken a serious note of hotels and restaurants levying additional charges, such as “LPG charges”, “gas surcharge”, and “fuel cost recovery”, in consumer bills in the wake of the war in West Asia, terming it an unfair trade practice under the Consumer protection Act 2019.

Observing that such charges are being imposed by default to circumvent existing guidelines on service charges, the CCPA has issued a fresh advisory under section 10 of the Consumer Protection Act 2019 directing that no such charges shall be levied automatically, and warned that violations may invite strict action.

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The CCPA observed, based on grievances received on the National Consumer Helpline (NCH), and media reports, that certain hotels and restaurants are levying such charges in the consumer bill by default, over and above the price of food and beverages displayed in the menu and applicable taxes. Such practices result in lack of transparency and impose unjustified costs on consumers.

The present practice of levying “LPG charges” or similar charges is an attempt to circumvent the aforesaid guidelines by adopting a different nomenclature. The CCPA has clarified that input costs such as fuel, LPG, electricity, and other operational expenses are part of the cost of running a business and must be factored into the pricing of menu items. Recovery of such costs through separate mandatory charges constitutes an unfair trade practice under Section 2(47) of the Act.

The advisory says no hotel or restaurant shall levy “LPG charges”, “gas charges”, or similar charges by default or automatically in the bill, the price displayed in the menu shall be the final price, exclusive only of applicable taxes and consumers shall not be misled or compelled to pay any additional charge that is not voluntary in nature.

The advisory further reiterates that any such charges, irrespective of nomenclature, are in the nature of service charge or additional fees and their levy by default would amount to violation of the CCPA Guidelines dated 04.07.2022, and may attract action under the Consumer Protection Act, 2019.

Consumers, who encounter such practices, can request the hotel or restaurant to remove the charge from the bill, lodge a complaint on the National Consumer Helpline by calling 1915 or through the NCH mobile app, file a complaint before the appropriate Consumer Commission through the e-Jagriti portal; and submit a complaint to the District Collector or directly to the CCPA.