The authority has issued notices under the Consumer Protection Act 2019, directing the restaurants to refund the service charge amounts
The Central Consumer Protection Authority (CCPA) has taken suo moto action against five restaurants in Delhi for failing to refund mandatory service charges despite a judgment held by the Delhi High Court. CCPA has issued notices under the Consumer Protection Act 2019, directing the restaurants to refund the service charge amounts.
The Ministry of Consumer Affairs, Food and Public Distribution highlighted that 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. As per the order by the Delhi HC, no hotel or restaurant can now force a consumer to pay a service charge, or a service charge shall not be collected from consumers by any other name.
Notices issued to restaurants include Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation, as per the official statement. On 28 March 2025, the Delhi High Court upheld the CCPA guidelines on service charges.
CCPA stated that, through complaints received on the National Consumer Helpline (1915), 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 indulging in unfair trade practices as per the Consumer Protection Act 2019.
On 4 July 2022, the CCPA issued guidelines to curb unfair trade practices and protect consumer interests regarding service charges in hotels and restaurants. The guidelines also stipulate that service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
