The Central Consumer Protection Authority (CCPA) has taken suo motu action against 27 restaurants across India for mandatorily levying service charges on food bills, calling the practice a violation of consumer rights and an unfair trade practice under the Consumer Protection Act, 2019.
The action follows a March 28, 2025 Delhi High Court ruling, which upheld the CCPA’s 2022 guidelines stating that compulsory service charges by restaurants are illegal. The court also affirmed the CCPA’s authority to enforce these rules.
Investigations revealed that many restaurants were automatically adding service charges, typically around 10%, to customer bills, violating Section 2(47) of the Consumer Protection Act. Cases were initiated after consumers filed complaints with the National Consumer Helpline, supported by invoices showing the automatic charges. Penalties of up to Rs 50,000 were imposed, along with directives for refunds and corrective measures.
Notable actions include Café Blue Bottle in Patna, ordered to refund service charges, discontinue the practice, and pay Rs 30,000. China Gate Restaurant (Bora Bora) in Mumbai refunded charges during the hearing, was fined Rs 50,000, and directed to remove default service charges from its billing system.
The CCPA emphasized that under its July 4, 2022 guidelines, restaurants cannot automatically add service charges, cannot collect them under other names, and must inform customers that paying the charge is voluntary. Denying service for refusal to pay or including the charge for GST purposes is strictly prohibited.
The authority continues to monitor complaints via the National Consumer Helpline and will take strict action against violators to protect consumer rights.
