CCPA looks into service charge related complaints against restaurants

Investigations revealed that several restaurants were automatically levying a 10 per cent service charge by default, in clear violation of the Consumer Protection Act, 2019 and the CCPA Guidelines
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SHIV KUMAR PUSHPAKAR

The Central Consumer Protection Authority (CCPA) on Saturday said it has taken suo motu cognizance against 27 restaurants for mandatory levy of service charge in violation of provisions of the Consumer Protection Act. It added that it has also imposed penalties of upto ₹50,000 on some of these restaurants, while directed them to refund service charge customers and to modify their billing systems. 

The Authority said this action follows the judgment of the Delhi High Court in March, 2025 which upheld the guidelines issued by CCPA on levy of service charge. It held that mandatory collection of service charge by restaurants is contrary to law and observed that all restaurant establishments are required to adhere to the CCPA guidelines. “The Court further affirmed that CCPA is fully empowered to enforce its guidelines in accordance with law,” CCPA added. 

“Investigations revealed that several restaurants, including Café Blue Bottle, Patna, and China Gate Restaurant Private Limited (Bora Bora), Mumbai, were automatically levying a 10 per cent service charge by default, in clear violation of the Consumer Protection Act, 2019 and the CCPA Guidelines, which have now been upheld by the Hon’ble High Court of Delhi “ CCPA added. 

The Authority said the action was based on complaints received on the National Consumer Helpline (NCH).

penalty imposed

In the case of Cafe Blue Bottle, CCPA imposed a penalty of ₹30,000, directed refund the amount of service charge to customer and Discontinue the practice of levying service charge with immediate effect

Similarly it asked China Gate Restaurant to pay ₹50,000 as penalty among other directions 

“The Central Consumer Protection Authority is closely monitoring complaints received on the National Consumer Helpline regarding levy of service charge and will continue to take strict action against non-compliant restaurants to safeguard consumer rights and prevent unfair trade practices,” it added.

Published on January 10, 2026