The Central Consumer Protection Authority (CCPA) has initiated suo motu action against 41 restaurants for allegedly adding service charges without customer consent, according to the Ministry of Consumer Affairs, Food and Public Distribution. Union Minister Pralhad Joshi confirmed in a social media post that the penalty was imposed on Chaayos, Barbeque Nation, L'Opera French Bakery Private Limited and others, reaffirming that service charge is voluntary and entirely at the consumer's discretion. The consumer watchdog has passed final orders in several cases and initiated proceedings against others after receiving complaints through the National Consumer Helpline (NCH), supported by bills showing that service charges were added without customers' explicit consent. Chaayos (Sunshine Teahouse Pvt. Ltd.) was among the restaurants against which the CCPA passed a final order, imposing a penalty of ₹50,000 for levying a service charge by default. The authority also directed the company to reimburse the service charge collected from consumers and modify its software-generated billing system across all outlets to ensure service charges are not added automatically to customers' bills.
The action follows the Delhi High Court's ruling on March 28, 2025 that upheld the CCPA's service charge guidelines, making it clear that mandatory service charges have no legal basis and empowering the consumer watchdog to enforce the rules. According to the Ministry of Consumer Affairs, the authority has been monitoring compliance with its service charge guidelines issued on July 4, 2022, which were upheld by the Delhi High Court on March 28, 2025. The court ruled that mandatory collection of service charges is contrary to law and clarified that all restaurants must comply with the guidelines, stating that the CCPA is free to enforce these rules in accordance with the law. Following the court's ruling, the CCPA received several complaints through the National Consumer Helpline (1915), alleging that restaurants were still adding service charges by default or refusing to refund them when requested. Union Minister of Consumer Affairs Pralhad Joshi stated that the CCPA has imposed penalties on violators and directed them to discontinue the automatic levy of service charge, reaffirming that paying a service charge is voluntary and entirely at the consumer's discretion. The CCPA has urged diners who encounter such charges to lodge complaints via the toll-free NCH number (1915) or its online platform, and said it would keep monitoring the sector for violations.
The CCPA's 2022 guidelines clearly state that no hotel or restaurant shall add a service charge automatically or by default in the food bill, and such practices violate consumer rights and amount to an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019. The authority emphasized that no collection of service charge shall be done by any other name and that no hotel or restaurant shall force or pressure customers to pay a service charge. The guidelines also prohibit service charges from being added by default or under any other name, force or pressure customers to pay, deny entry or service to customers who refuse to pay, club the service charge with the food bill, or levy GST on the service charge. The ministry noted that investigators relied on customer invoices showing the charge had been added without any explicit consent being sought, which breached the 2022 guidelines and amounted to an unfair trade practice under the Consumer Protection Act, 2019. The CCPA reiterated that a service charge is voluntary and cannot be imposed on consumers without their consent, with no restriction on entry or provision of services based on collection of service charge.
Besides Chaayos, the CCPA has issued final orders against several other restaurant establishments including Cafe Blue Bottle, Patna, China Gate Restaurant Pvt. Ltd., Fiesta Barbeque Nation (Barbeque Nation Hospitality Private Limited), FOO Ahmedabad Restaurant (Pebble Street Hospitality Pvt. Ltd.), L'Opera French Bakery Private Limited, and Zorro – The Luxury Night Club (a unit of Rudra Hospitality Private Limited). According to the Ministry of Consumer Affairs, proceedings are also underway against other restaurants where similar complaints have been received and examined. The authority's action is aimed at protecting consumer rights and preventing restaurants from compelling customers to pay additional charges while availing services. The Department of Consumer Affairs has urged consumers who find restaurants adding service charges without their consent to lodge complaints through the National Consumer Helpline by calling 1915 or using its online grievance platform, and said it would continue to take action against establishments found violating the Consumer Protection Act, 2019, and the service charge guidelines.
