In a strong move to protect consumer rights, the Central Consumer Protection Authority (CCPA) has taken action against 27 restaurants across India for illegally adding service charges to customer bills. The authority imposed fines of up to ₹50,000 and ordered restaurants to refund the wrongly collected amounts, sending a clear warning to the hospitality industry.
The action follows multiple complaints received through the National Consumer Helpline (NCH), where diners reported being forced to pay service charges that were automatically added to their bills.
What Triggered the CCPA Action?
The CCPA stepped in after discovering that several restaurants were adding a fixed service charge — often 10 percent — by default, without asking customers or making it optional.
This practice violates the Consumer Protection Act, 2019 and the service charge guidelines issued by the CCPA in July 2022. These rules were recently upheld by the Delhi High Court, strengthening the authority’s legal backing.
According to officials, this kind of billing amounts to an “unfair trade practice” under Section 2(47) of the law.
Restaurants Found in Violation
Among the establishments named in the investigation were Café Blue Bottle in Patna and China Gate Restaurant Pvt Ltd (Bora Bora) in Mumbai.
Café Blue Bottle, Patna
The CCPA ordered the restaurant to:
- Refund the entire service charge collected from the complainant
- Stop levying service charges immediately
- Pay a penalty of ₹30,000
China Gate (Bora Bora), Mumbai
The restaurant refunded the service charge during the hearing. However, the CCPA also directed it to:
- Modify its billing software so no service charge is added by default
- Pay a penalty of ₹50,000
Delhi High Court Strengthens Consumer Rights
The CCPA’s action follows a major ruling by the Delhi High Court in March 2025. The court upheld the authority’s guidelines and clearly stated that mandatory service charges are illegal.
The judges also confirmed that the CCPA has full power to enforce these rules and penalize businesses that do not comply.
This judgment has now made it clear that restaurants cannot bypass consumer rights by quietly adding charges to the final bill.
What Do the Service Charge Rules Say?
The CCPA’s 2022 guidelines lay down simple and consumer-friendly rules:
- Restaurants cannot automatically add a service charge
- No service charge can be collected under any other name
- Customers must be clearly told that paying a service charge is voluntary
- No customer can be denied service or entry for refusing to pay it
These guidelines aim to ensure transparency and fairness in restaurant billing.
CCPA to Continue Monitoring Complaints
The consumer watchdog said it is closely tracking complaints coming through the National Consumer Helpline and will continue to take strict action against any restaurant that ignores the law.
Officials stressed that the goal is not just to punish, but to ensure that customers across India are treated fairly and are not forced to pay hidden or misleading charges.
Summary: Key Highlights
- 27 restaurants fined for illegally adding service charges
- Penalties up to ₹50,000 imposed
- Restaurants ordered to refund customers
- Delhi High Court confirmed mandatory service charges are illegal
- Service charges must be voluntary and optional
- CCPA will keep monitoring complaints nationwide
With this decisive action, the CCPA has sent a strong message to the restaurant industry: transparency in billing is not optional — it is the law. For diners, it is a welcome step toward fair treatment and honest pricing at the table.