Have you taken a look at your restaurant bill lately, only to find an unfamiliar term such as ‘gas surcharge/ gas cost recovery or LPG charges’?
Believe it or not, it wasn’t that long ago when the addition of such charges as ‘Fuel Cost Recovery’ first started appearing sporadically within the bills issued by both hotels and restaurants doing business in India. The government recently decided to put an end to this practice once and for all!
CCPA Advisory on LPG Charges and Gas Surcharge in Restaurant Bills
According to an Advisory issued by the Central Consumer Protection Authority (CCPA), these types of hidden charges have been identified as ‘unfair trade practices’ under the provisions of the Consumer Protection Act 2019, and now, the CCPA wants everyone to know that restaurants and hotels can no longer charge hidden fees when they add additional amounts onto your bill with ‘fancy labels’ such as ‘LPG charges or ‘Gas Surcharge’.
Yes, a big W for consumers across India!
They also want to alert consumers to be careful of any restaurant or hotel that does so, because if they do, they will be subjecting themselves to serious punishment.
Consumer Protection Act 2019 Rules on Hidden Charges in Restaurant Billing
The CCPA’s action against these secret charges is not the result of a random inspection; however, authorities have begun to see a pattern form itself vividly through complaints made via both: the National Consumer Helpline (NCH) and through media reports illustrating that consumers across India have been stating that they were charged additional amounts on their bills.
In its advisory, the CCPA clearly stated that all hotels and restaurants must not add ‘Fuel Cost Recovery’ or ‘Gas Surcharge’ charges automatically or by default, when issuing customers their bill. The CCPA noted that these charges are likely to cause the restaurants or hotels who impose such a charge to potentially violate many of the current laws concerning Service Charges.
The government also made it clear that if they create a different name for the charge, it does not legally allow them to continue imposing the charge on consumers.
Haan haan Shakespeare bhai keh gaye, what’s in a name..but that does not translate to shapeshifting taxes by using different names every time.
Whether you refer to it as crisis charge, LPG charge, or whichever other name; it boils down to the same thing; an additional cost or fee imposed on consumers in a non-transparent manner.
Menu Pricing Transparency: Why Restaurants Must Include LPG and Fuel Costs Upfront
To put it in simple & susheel words: why does this matter at all?
The heart of the issue here is transparency and consent. When ordering food, you rely on the price on the menu to determine how much you should pay. Any additional fee added to your bill without any previous notice or choice will diminish your faith in that price.
The Consumer Protection [of Consumer Goods and Services] Assistant (CCPA) has stated that costs incurred in producing your food (i.e., fuel, LPG, electricity, or other operating expenses) should be part of the menu price, not just added as an additional fee at the time of billing.
Adding these fees after the order causes businesses to transfer their operating costs to the consumer without transparency, which violates Section 2(47) of the Consumer Protection Act by constituting an unfair trade practice.
The Consumer Protection Act, 2019 defines what constitutes a misleading charge in restaurants.
The Consumer Protection Act, 2019 seeks to protect consumer rights in India and combat unfair and misleading pricing practices.
Under the Act:
- Businesses must provide pricing that is clear and transparent.
- Businesses must not impose charges on customers without the customer’s consent.
- Any action that deceives or misleads a customer into paying more than theThe CCPA advisory reiterates the fundamental principles previously outlined in this document, i.e., any charge, other than those that appear on a menu (excluding tax), shall only be added to a customer upon request.
In the simplest of terms, what is listed on the menu is the price you will pay (excluding GST if applicable). No surprises and no unexpected math will be required!
Thank god, because math and I cannot co-exist.
All menus must include [how] restaurants will charge for items that are included in the operation of running a restaurant such as fuel, LPG, and electricity supply, and all these expenses are essential to the operation of any business. CCPA also made clear that these costs shall be included when calculating the menu item price.
This assures:
• Consumer transparency
• Level playing field for all competitors
• No last-minute billing shock
CCPA’s advisory is intended to create consistency in price by requiring that all businesses add all their operating costs before charging the consumer, thereby maintaining consumer confidence.
What Consumers Should Do If Restaurants Add LPG Charges or Extra Fees in Bills
When charges appear on your bill, the following are the avenues available from CCPA for consumers:
1. Request that the restaurant remove the charge and as it is not a required charge, it should in fact be removed.
2. Contact the National Consumer Helpline (1915): Report the charge and file a complaint directly to the NCH.
3. Use the NCH app or portal to track your complaint digitally.
4. If necessary, initiate legal action through the e-Jagriti Portal with the consumer commission.
It is important to keep in mind that it is not just about so-called wasted money or rupees; but rather about exercising rights as a consumer.
At first glance, an additional ₹20 or ₹50 may not seem like much, however when multiplied by tens of millions of consumers the result is thrilling.