The Central Consumer Protection Authority (CCPA) has taken suo moto action against five restaurants - Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation - for failing to refund mandatory service charges despite judgment held by Hon'ble High Court of Delhi, the Ministry of Consumer Affairs, Food and Public Distribution said, reported ANI. The notices have been issued under the Consumer Protection Act, 2019, directing the restaurants to refund the service charge amounts.
This measure is aimed at reducing the undue pressure on consumers to pay an additional amount at the time of availing services at any restaurant. According to the Ministry of Consumer Affairs, Food and Public Distribution, no hotel or restaurant shall force a consumer to pay a service charge, and service charges shall not be collected from consumers under any other name.
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The Central Consumer Protection Authority (CCPA) issued guidelines on July 4, 2022, to curb unfair trade practices and protect consumer interests. On March 28, 2025, the Delhi High Court upheld the CCPA guidelines on service charges. Subsequently, it came to the notice of the CCPA that grievances had been registered through complaints on the National Consumer Helpline (1915), alleging that certain restaurants continued to impose a mandatory service charge without obtaining prior consent from consumers, thereby disregarding consumer rights and indulged in unfair trade practices as per the Consumer Protection Act, 2019.
CCPA Guidelines On Service Charges In Hotels And Restaurants:
- No hotels or restaurants shall add a service charge automatically or by default to the food bill.
- No collection of service charge shall be done by any other name.
- No hotel or restaurant shall force a consumer to pay the service charge and shall clearly inform the consumer that the service charge is voluntary, optional and at the consumer's discretion.
- No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers.
- Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
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The CCPA's primary mandate is to regulate matters related to the violation of consumer rights, unfair trade practices, and false or misleading advertisements.