The Central Consumer Protection Authority (CCPA) on Wednesday issued a warning to hotels and restaurants, stating that imposing extra fees like ‘LPG charges’ or ‘fuel cost recovery’ amounts to unfair trade practices. The authority emphasized that strict action will be taken against establishments that violate this directive.

The authority has termed it an unfair trade practice under the Consumer Protection Act, 2019, pointing out that only applicable taxes can be added to the price mentioned in the menu.

According to an official statement, the CCPA has "taken serious note of hotels and restaurants levying additional charges such as 'LPG charges', 'gas surcharge' and 'fuel cost recovery' in consumer bills".

The CCPA observed that such charges are being imposed to circumvent existing guidelines on service charges.

The authority has issued a fresh advisory under section 10 of the Consumer Protection Act 2019, instructing that charges should not be levied immediately and warned that violation of this directive would result in strict actions.

According to the statement, The CCPA has received several grievances in this regard on the National Consumer Helpline (NCH), that certain hotels are partaking in the exercise of levying charges in the consumer bill by default, above the food and beverage charges mentioned in menu coupled with applicable taxes.

Such practices result in a lack of transparency and impose unjustified costs on consumers.

The CCPA 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 authority said.

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".

Menu prices should represent the final cost, exclusive of taxes. The authority stated that “consumers cannot be compelled to pay any additional charges that are not voluntary.”

The CCPA stated that any such charges, irrespective of nomenclature, are in the nature of service charges or additional fees and their levy by default would amount to a violation of the CCPA Guidelines issued on July 4, 2022, and may attract action under the Consumer Protection Act, 2019.