Unhappy customers paying service tax on food bills: Centre

NEW DELHI:  The Centre and the Central Consumer Protection Authority (CCPA) on Wednesday told the Delhi High Court that hotels and restaurants were collecting service charges on food bills while openly flouting the guidelines banning the levy.

They claimed consumers were involuntarily paying service charges even when they were dissatisfied with the services. The submissions were made by the authorities in their application seeking a vacation of stay granted by the high court on the CCPA’s July 4  guidelines prohibiting hotels and restaurants from levying service charges on food bills.

Justice Yashwant Varma was informed about the Centre and CCPA having also filed their counter affidavits in response to the petitions challenging the July 4 CCPA guidelines which have irked hotel and restaurant owners.

The court asked the counsel for the two authorities to bring the documents on record after which the petitioners - the National Restaurant Association of India and the Federation of Hotels and Restaurant Associations of India may file their replies. The court listed the matter for further hearing on October 6.

The single judge had on July 20 passed an interim order staying the guidelines. Thereafter, the Centre and CCPA challenged the order before the division bench which asked the authorities to approach a single judge for appropriate relief.

The authorities contended in their vacation of stay plea they were not provided adequate time and opportunity to present their case and the interim order was passed post-haste. They said this grave hardship has been caused to consumers at large who have been made to pay service charges mandatorily without there being any element of discretion on their part.

The plea said the guidelines have been issued for safeguarding the rights of consumers and seeking to protect them from unfair trade practices.