The Central Consumer Protection Authority (CCPA) has issued an advisory stating that hotels and restaurants cannot levy additional charges such as 'LPG charges', 'gas surcharge' or 'fuel cost recovery' by default.
It said that such practices amount to unfair trade under the Consumer Protection Act, 2019.
In the advisory dated March 25, the regulator said that input costs like fuel, LPG and electricity are part of the cost of running a business and must be factored into menu prices rather than recovered through separate, mandatory charges on consumers.
The regulator warned that non-compliance may attract action under the Consumer Protection Act.
The CCPA advisory comes amid a broader LPG supply crunch in India triggered by geopolitical disruptions in West Asia.
Industry reports indicate that the ongoing conflict involving Iran has disrupted global energy supply chains, particularly through the Strait of Hormuz — a critical maritime route through which a majority of India’s LPG imports are transported
The move by CCPA came after complaints were received through the National Consumer Helpline and media reports which flagged that restaurants and hotels were increasingly adding such charges to bills under various names, over and above the listed price of food items and applicable taxes.
Referring to its July 4, 2022 guidelines on service charge, the CCPA reiterated that the price of food and beverages already includes both goods and service components. Any additional mandatory charge beyond the displayed price would constitute an unfair trade practice, the CCPA said.
The advisory clarified that imposing such charges reflects lack of transparency and amounts to passing unjustified costs onto consumers. It also warned that using different terminology for such levies is an attempt to circumvent existing guidelines that prohibit default or automatic additional charges.
“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,” the authority noted, adding that they would be treated as violations of its earlier guidelines
Hence, CCPA directed that no hotel or restaurant shall levy such charges automatically or by default in bills. It further mandated that menu prices must represent the final price payable by consumers, excluding only applicable taxes.
Consumers must not be misled or compelled to pay any additional charge that is not explicitly part of the menu price and is not voluntary in nature, the advisory added.
The authority also set out steps consumers can take if such charges are imposed. These include requesting removal of the charge from the bill, filing a complaint with the National Consumer Helpline or approaching consumer commissions for redressal.
The advisory has been issued to all States and Union Territories, district collectors, the Ministry of Tourism and industry bodies such as the Federation of Hotel and Restaurant Associations of India (FHRAI) and the National Restaurant Association of India (NRAI).
[Read Advisory]