Service Charge Crackdown: 27 Restaurants Face Action

The Central Consumer Protection Authority (CCPA) has launched a nationwide initiative, initiating suo motu action against 27 restaurants for allegedly violating consumer rights by imposing mandatory service charges. This decisive step was taken following a significant ruling by the Delhi High Court on March 28, 2025. The court affirmed the CCPA's 2022 guidelines, declaring the mandatory levy of service charge 'contrary to law' and validating the authority's power to enforce these directives.

These guidelines, issued on July 4, 2022, explicitly state that no hotel or restaurant shall automatically add service charges to bills. Consumers must be clearly informed that service charges are voluntary and optional, with no penalties for refusal. Investigations revealed establishments like Café Blue Bottle and China Gate Restaurant (Bora Bora) were adding a 10% charge by default, constituting an unfair trade practice. Consequently, these restaurants faced directives for refunds, discontinuation of mandatory charges, software modifications, and substantial penalties, including Rs 30,000 and Rs 50,000 respectively.

The CCPA continues to monitor complaints lodged on the National Consumer Helpline and pledges to maintain strict action against non-compliant establishments, thereby safeguarding consumer rights nationwide.