The action follows complaints received through the national consumer helpline (NCH), in which consumers submitted invoices showing that service charges had been automatically added to their restaurant bills without their consent.
Based on these complaints, CCPA conducted investigations and found that the practice violated the guidelines to prevent unfair trade practices and protection of consumer interest with regard to the levy of service charge in hotels and restaurants, issued on 4 July 2022.
The consumer watchdog said the automatic levy of service charge also amounts to an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019.
As part of the enforcement action, CCPA has passed a final order against Chaayos (Sunshine Teahouse Pvt Ltd), imposing a penalty of ₹50,000 for levying service charge by default. The authority has directed the company to reimburse the service charge collected from the consumer and modify its software-generated billing system across all its outlets to ensure that the service charge or any similar charge is not added automatically to customers' bills.
CCPA has also passed final orders against: Cafe Blue Bottle in Patna, China Gate Restaurant Pvt Ltd, Fiesta Barbeque Nation operated by Barbeque Nation Hospitality Pvt Ltd, FOO Ahmedabad Restaurant operated by Pebble Street Hospitality Pvt Ltd, L'Opera French Bakery Pvt Ltd and Zorro – The Luxury Night Club, a unit of Rudra Hospitality Pvt Ltd. Proceedings against the remaining restaurants are currently underway.
In the release, the Union ministry of consumer affairs said the enforcement drive has gained further legal backing following the Delhi High Court's judgement dated 28 March 2025, in National Restaurant Association of India & others vs Union of India & others. The High Court upheld the validity of the service charge guidelines by CCPA and held that the mandatory collection of service charges is contrary to law. It also clarified that all restaurant establishments are required to comply with the guidelines and that CCPA is free to enforce them in accordance with the law.
Under the CCPA guidelines, no hotel or restaurant can add a service charge automatically or by default to a food bill or collect such charges under any other name. Restaurants cannot force consumers to pay a service charge and must clearly inform customers that payment of the charge is voluntary, optional and entirely at the consumer's discretion. The guidelines also prohibit restaurants from denying entry or service to customers who refuse to pay a service charge and state that goods and services tax (GST) cannot be levied on any service charge amount.
The ministry reiterated that the service charge is not a mandatory payment and cannot be imposed on consumers without their explicit consent. It said investigations into the complaints found that several restaurants had adopted billing practices contrary to both the service charge guidelines and the Consumer Protection Act.
Union minister for consumer affairs Pralhad Joshi also highlighted the action on social media, stating that the service charge is voluntary and entirely at the consumer's discretion.
CCPA has urged consumers to report instances where restaurants levy a service charge by default through the national consumer helpline by calling the toll-free number 1915 or by filing complaints through the NCH platform. The authority said it will continue monitoring complaints related to service charges and take appropriate action against establishments found in violation of the Consumer Protection Act, 2019, and the service charge guidelines, reaffirming its commitment to protecting consumer rights and ensuring transparent billing practices in the hospitality sector.
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