The Central Consumer Protection Authority (CCPA) has stepped in after five popular Delhi restaurants failed to refund mandatory service charges to customers. Taking suo moto action, the CCPA flagged well-known names like Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation for ignoring a Delhi High Court ruling on the issue.
The Ministry of Consumer Affairs stated on Tuesday that notices have been sent to the restaurants under the Consumer Protection Act, 2019, asking them to refund the collected service charges. The Ministry explained that these steps are meant to protect consumers from being pressured into paying extra charges at restaurants. No hotel or restaurant can force customers to pay a service charge, or collect it under any other name.
The Central Consumer Protection Authority (CCPA) issued guidelines in 2022 to curb unfair trade practices and protect consumer interests regarding service charges in hotels and restaurants. The guidelines stipulate that no hotels or restaurant shall add service charge automatically or by default in the food bill.
According to the guidelines no collection of service charge shall be done by any other name. No hotel or restaurant shall force a consumer to pay service charge and shall clearly inform the consumer that service charge is voluntary, optional and at consumer’s discretion, as per the direction. The guidelines further mandates that no restriction on entry or provision of services based on collection of service charge shall be imposed on consumers.
In addition, the service charge shall not be collected by adding it along with the food bill and levying GST on the total amount. On March 28, 2025, the Delhi High Court upheld the CCPA guidelines on service charges.
Subsequently, it came to the notice of the Central Consumer Protection Authority (CCPA), through complaints received on the National Consumer Helpline (1915), that grievances had been registered 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.
Central Consumer Protection Authority (CCPA) was established under Section 10 of the Consumer Protection Act, 2019. Its primary mandate is to regulate matters related to the violation of consumer rights, unfair trade practices, and false or misleading advertisements that are detrimental to the interests of the public and consumers at large. (With ANI Inputs)
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