With the rise in oil prices and shortage of LPG amid the ongoing geopolitical tensions in the Middle East due to the war between the US, Israel, and Iran, the Central Consumer Protection Authority (CCPA) is cracking down on hotels and restaurants that levy “LPG charges,” “gas surcharges,” or “fuel cost recovery” fees in customer bills. Under the Consumer Protection Act, 2019, the CCPA has termed the hidden fees as an unfair trade practice.
Observing that the addition of such charges is an attempt “to circumvent the existing guidelines on service charges”, the CCPA – the country’s top consumer watchdog – has issued a fresh advisory under section 10 of the Consumer Protection Act 2019, directing that no such charges shall be levied automatically.
The authority further warned that violations may invite strict action, informed the Ministry of Consumer Affairs, Food & Public Distribution in a statement today.
The CCPA has 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 a lack of transparency and impose unjustified costs on consumers, the Ministry stated.
“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 statement by the ministry read.
“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 an advisory issued by CCPA Chief Commissioner Nidhi Khare.
Through this advisory, the CCPA has advised that:
- 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.
- Consumers shall not be misled or compelled to pay any additional charge that is not voluntary in nature.
“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.
Consumer grievance redressal
CCPA further advised that consumers who encounter such practices may take the following steps:
- 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
- Submit a complaint to the District Collector or directly to the CCPA.
The CCPA is closely monitoring such practices across the country. Any violation, including the imposition of unfair or unauthorised charges by hotels and restaurants, will be dealt with appropriately, and necessary action shall be taken by the CCPA under the provisions of the Act to safeguard the interests of consumers, the ministry stated.
