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CCPA cracks down on 41 restaurants for auto-levying service charges
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Tuesday, 21 July, 2026, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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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 obtaining their explicit consent.
The action follows complaints received through the National Consumer Helpline (NCH), where consumers submitted invoices showing that service charges had been added to their bills by default. Based on these complaints, the CCPA conducted investigations and found that the practice violated the Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest about
The authority held that the automatic imposition of service charges constitutes an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019. The enforcement comes in the wake of the Delhi High Court's judgment dated March 28, 2025, in National Restaurant Association of India & Ors. v. Union of India & Anr., which upheld the validity of the CCPA's service charge guidelines. The court ruled that the mandatory collection of service charges is contrary to law and affirmed that restaurants must comply with the guidelines, while authorising the CCPA to enforce them.
The guidelines, issued on July 4, 2022, prohibit hotels and restaurants from automatically adding service charges to food bills or collecting them under any other name. They also require establishments to clearly inform consumers that payment of service charges is voluntary and entirely at the customer's discretion.
Additionally, restaurants cannot deny entry or services to consumers who choose not to pay a service charge. The guidelines also state that service charges must not be included in the food bill and that GST cannot be levied on such charges.
In one of the cases, the CCPA imposed a Rs 50,000 penalty on Chaayos (Sunshine Teahouse Pvt. Ltd.) for levying service charges by default. The authority directed the company to reimburse the service charge collected from the consumer and modify its software-generated billing system across all outlets to ensure that service charges or similar fees are not automatically added to customer 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 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).
The authority said further proceedings are underway against other restaurants where similar complaints have been received and investigated, signalling continued enforcement against unfair billing practices in the hospitality sector.
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