Indian Restaurants
Restaurants can't force you to pay service charge: CCPA now takes action against over 40 eateries
The Central Consumer Protection Authority (CCPA) has initiated suo motu action against 41 restaurants across India for allegedly violating consumer rights by automatically levying service charges on customers' bills without their explicit consent.
The action follows complaints received through the National Consumer Helpline (NCH), the government said in a statement on Monday.
According to the statement, the complaints were supported by invoices showing that service charges had been added to bills by default without obtaining consumers' consent.
Following an investigation, the CCPA found that the practice violated the Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants. The authority also held that the automatic levy of service charge constitutes an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019.
The action comes after the Delhi High Court, in its March 28, 2025 judgment in National Restaurant Association of India & Others vs Union of India & Another, upheld the validity of the CCPA's service charge guidelines and ruled that the mandatory collection of service charges is contrary to law.
The court further clarified that all restaurants are required to comply with the guidelines and that the CCPA is free to enforce them in accordance with the law.
CCPA guidelines on service charge
The guidelines, issued on July 4, 2022, provide that:
Hotels and restaurants must not add a service charge automatically or by default to food bills.
Service charges cannot be collected under any other name.
Consumers cannot be forced to pay a service charge and must be clearly informed that it is voluntary, optional and entirely at their discretion.
Restaurants cannot deny entry or refuse service to customers who choose not to pay a service charge.
Service charges must not be included in the bill for the purpose of levying GST.
Action against restaurants
In one case, the CCPA imposed a penalty of Rs 50,000 on Chaayos (Sunshine Teahouse Pvt. Ltd.) for automatically levying a service charge and directed the company to refund the amount collected from the complainant.
The authority also ordered Chaayos to modify its software-generated billing system across all outlets to ensure that service charges, or any similar charges, are not added automatically to customers' bills.
The CCPA has also passed final orders against several other restaurant establishments, including:
Cafe Blue Bottle, Patna
China Gate Restaurant Pvt. Ltd.
Fiesta Barbeque Nation (Barbeque Nation Hospitality Pvt. Ltd.)
FOO Ahmedabad Restaurant (Pebble Street Hospitality Pvt. Ltd.)
L'Opera French Bakery Pvt. Ltd.
Zorro – The Luxury Night Club (Rudra Hospitality Pvt. Ltd.)
Chaayos (Sunshine Teahouse Pvt. Ltd.)
The government said proceedings are continuing against other restaurants where similar complaints have been received and examined.
How consumers can report violations
The CCPA has urged consumers to report instances of restaurants levying service charges by default through the National Consumer Helpline (NCH) by calling the toll-free number 1915 or by filing complaints on the NCH platform.
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