Consumer Authority Takes Action Against 27 Restaurants Over Illegal Service Charges
The Central Consumer Protection Authority (CCPA) has taken action against 27 restaurants across India for forcing customers to pay service charges. This move follows a Delhi High Court ruling that supports the CCPA’s 2022 guidelines.
The investigation began after many people filed complaints on the National Consumer Helpline. These customers shared bills showing that service charges were added automatically without their consent.
Delhi High Court Supports CCPA Guidelines
On March 28, 2025, the Delhi High Court confirmed that making service charges mandatory is against the law. The court ruled that all hotels and restaurants must follow the official guidelines issued on July 4, 2022.
According to these rules:
- Restaurants cannot add a service charge to your bill automatically or by default.
- They cannot collect a service charge under a different name.
- Paying a service charge is completely voluntary. Restaurants must clearly tell customers it is optional.
- A restaurant cannot refuse to serve you or let you enter if you decide not to pay the charge.
- Service charges cannot be added to the bill and then taxed with GST.
Restaurants Caught Charging Customers Automatically
During its investigation, the CCPA found that several places—including Café Blue Bottle in Patna and China Gate (Bora Bora) in Mumbai—were adding a 10% service charge by default.
The CCPA verified these complaints and concluded that these billing methods are “Unfair Trade Practices” under the Consumer Protection Act, 2019.
Penalties for Café Blue Bottle and China Gate
After confirming the violations, the CCPA ordered specific actions against these establishments.
Café Blue Bottle, Patna must:
- Give the customer a full refund of the service charge.
- Stop adding mandatory service charges immediately.
- Pay a penalty of Rs 30,000.
China Gate (Bora Bora), Mumbai: While the restaurant refunded the customer during the hearing, the CCPA still ordered them to:
- Change their billing software so it no longer adds service charges automatically.
- Pay a penalty of Rs 50,000.
- Ensure their public email address works so customers can easily report problems.
Nationwide Monitoring to Protect Consumers
The CCPA stated it is closely watching complaints on the National Consumer Helpline. The authority will continue to take strict action against any restaurant that ignores these rules. The goal is to protect consumer rights and ensure fair business practices across the country.
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