Hyatt Ahmedabad Penalised for Automatically Adding Service Charge to Customer’s Bill

Ahmedabad: The Ahmedabad District Consumer Disputes Redressal Commission (Rural) has directed Hyatt Ahmedabad to refund a ₹34.50 service charge and ₹6.20 in GST levied on it for two coffees, with 9% annual interest.

The commission also ordered the hotel to pay ₹2,000 as compensation for mental agony and ₹2,000 towards litigation costs, ruling that automatically adding a service charge amounts to an unfair trade practice.

The complaint was filed by Rohit Patel, who visited the hotel on September 11, 2025, and ordered a cappuccino and a cold coffee, each priced at ₹345. His bill totalled ₹854.90, including the service charge and applicable GST.

Patel argued that hotels cannot impose service charges by default or levy GST on them. He cited the Central Consumer Protection Authority’s (CCPA) guidelines issued on July 4, 2022, and sought a refund. He also sought a ₹1 lakh contribution to the Consumer Welfare Fund.

Despite receiving notice, the hotel neither appeared before the commission nor filed a reply, and the matter proceeded ex parte.

The commission noted that the bill stated, “Service Charge is at Discretion”, yet the charge was included in the amount payable. Citing the CCPA guidelines and a March 2025 Delhi High Court judgment upholding their legality, it ruled that service charges cannot be added automatically and must remain entirely at the customer’s discretion.

However, the commission rejected Patel’s demand for a ₹1 lakh contribution to the Consumer Welfare Fund, citing a lack of reliable evidence on the number of customers affected and the total amount collected through the practice.

DeshGujarat