{"id":372520,"date":"2026-01-13T17:30:24","date_gmt":"2026-01-13T12:00:24","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=372520"},"modified":"2026-01-13T17:36:56","modified_gmt":"2026-01-13T12:06:56","slug":"ccpa-declares-mandatory-service-charge-restaurants-against-ccpa-guidelines","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/01\/13\/ccpa-declares-mandatory-service-charge-restaurants-against-ccpa-guidelines\/","title":{"rendered":"Mandatory Service Charge Declared Illegal: CCPA Penalizes Restaurants Across India"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 10-1-2026, the <span style=\"font-weight: bold;\">Central Consumer Authority<\/span> <span style=\"font-weight: bold;\">(CCPA)<\/span> took <span style=\"font-style: italic;\">suo moto<\/span> action against <span style=\"font-weight: bold;\">27 restaurants<\/span> across India for mandatorily levying service charges, declaring the practice an unfair trade practice under Section 2(47) of the <span style=\"font-weight: bold;\">Consumer Protection Act, 2019<\/span>.<\/p>\n<h3>Background:<\/h3>\n<p style=\"margin-bottom: 3%;\">This action follows the <span style=\"font-weight: bold;\">Delhi High Court<\/span> judgment in <span style=\"font-style: italic;\">National Restaurant Association of India v. UOI<\/span> <a href=\"http:\/\/www.scconline.com\/DocumentLink\/zgbz2Q9n\" target=\"_blank\">2025 SCC OnLine Del 1975<\/a>, decided on 28-3-2025. The Court upheld the <span style=\"font-weight: bold;\">CCPA&#8217;s guidelines<\/span> on service charges, ruling that their mandatory collection is unlawful. It further affirmed the CCPA&#8217;s authority to enforce compliance under the Consumer Protection Act, 2019.<\/p>\n<p style=\"margin-bottom: 3%;\"><a href=\"https:\/\/www.scconline.com\/blog\/post\/2025\/04\/01\/delhi-high-court-mandatory-service-charge-unlawful-ccpa-guidelines-legal-news\/\" target=\"_blank\">Read more: Delhi High Court upholds CCPA Guidelines.<\/a><\/p>\n<h3>Key Takeaways:<\/h3>\n<ol style=\"list-style-type: decimal;\">\n<li>\n<p>To prevent unfair trade practices in hotels and restaurants, <span style=\"font-weight: bold;\">CCPA<\/span> had issued guidelines on 4-7-2022.<\/p>\n<\/li>\n<li>\n<p style=\"font-weight: bold;\">The CCPA Guidelines stated:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>No hotel or restaurant shall <span style=\"font-weight: bold;\">add service charge automatically or by default<\/span> in the food bill.<\/p>\n<\/li>\n<li>\n<p>Service charge <span style=\"font-weight: bold;\">cannot be collected under any other name<\/span>.<\/p>\n<\/li>\n<li>\n<p>Consumers must be informed that <span style=\"font-weight: bold;\">payment of service charge is voluntary and optional<\/span>.<\/p>\n<\/li>\n<li>\n<p>No restriction on entry or service provision can be imposed for refusal to pay service charge.<\/p>\n<\/li>\n<li>\n<p>Service charge <span style=\"font-weight: bold;\">cannot be added to the bill and subjected to GST<\/span>.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>There were complaints made on the National Consumer Helpline (&#8216;NCH&#8217;), supported by invoices showing automatic addition of service charge, that triggered this Action<\/p>\n<\/li>\n<li>\n<p>Investigations revealed that several restaurants, that included Caf&eacute; Blue Bottle (Patna) and China Gate Restaurant Pvt. Ltd. (Bora Bora, Mumbai), specificallly, were found to be automatically levying a <span style=\"font-weight: bold;\">10% service charge by default<\/span>, violating both the Act and CCPA guidelines.<\/p>\n<\/li>\n<li>\n<p>On <span style=\"font-weight: bold;\">13-11-2025<\/span>, the CCPA imposed the following on <span style=\"font-weight: bold;\">Caf&eacute; Blue Bottle<\/span>, Patna<a id=\"fnref1\" href=\"#fn1\" title=\"1. https:\/\/doca.gov.in\/ccpa\/checkuploaddocs.php?updocs=.\/uploads\/1763118526-Cafe_Blue_Bottle__Patna_.pdf&amp;unique_id=\"><sup>1<\/sup><\/a>:<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Refund full-service charge to the consumer.<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Discontinue the practice immediately.<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Pay a penalty of &#8377;30,000.<\/p>\n<\/li>\n<li>\n<p>On <span style=\"font-weight: bold;\">29-12-2025<\/span>, the CCPA imposed the following on <span style=\"font-weight: bold;\">China Gate Restaurant Pvt. Ltd<\/span>., Mumbai<a id=\"fnref2\" href=\"#fn2\" title=\"2. https:\/\/doca.gov.in\/ccpa\/checkuploaddocs.php?updocs=.\/uploads\/1767008364-Final_Order.pdf&amp;unique_id=\"><sup>2<\/sup><\/a>:<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Refund service charge during the hearing.<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Modify billing software to remove default service charge.<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Pay a penalty of &#8377;50,000.<\/p>\n<p style=\"margin-left: 36pt; text-indent: -18pt;\">&#9675; Ensure active email ID for consumer grievance redressal as mandated under the Act.<\/p>\n<\/li>\n<li>\n<p>By penalizing violators and enforcing compliance, the CCPA has reinforced that consumer rights cannot be compromised and hidden charges have no place in India&#8217;s hospitality sector.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n<hr\/>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\"><a id=\"fn1\" href=\"#fnref1\">1.<\/a> <a href=\"https:\/\/doca.gov.in\/ccpa\/checkuploaddocs.php?updocs=.\/uploads\/1763118526-Cafe_Blue_Bottle__Patna_.pdf&amp;unique_id=#%3A%7E%3Atext%3D%28b%29%2520The%2520Restaurant%2520has%2520stopped%2Crefund%2520could%2520not%2520be%2520completed.\" target=\"_blank\">https:\/\/doca.gov.in\/ccpa\/checkuploaddocs.php?updocs=.\/uploads\/1763118526-Cafe_Blue_Bottle__Patna_.pdf&amp;unique_id=<\/a><\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\"><a id=\"fn2\" href=\"#fnref2\">2.<\/a> <a href=\"https:\/\/doca.gov.in\/ccpa\/checkuploaddocs.php?updocs=.\/uploads\/1767008364-Final_Order.pdf&amp;unique_id=\" target=\"_blank\">https:\/\/doca.gov.in\/ccpa\/checkuploaddocs.php?updocs=.\/uploads\/1767008364-Final_Order.pdf&amp;unique_id=<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">CCPA has enforced consumer protection law against 27 restaurants; automatic service charge deemed illegal, penalties imposed to curb unfair trade practices.<\/p>\n","protected":false},"author":67525,"featured_media":372531,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1188,2],"tags":[50014,96728,96730,43025,37027,96726,2543,96729,96727,15661,96725,96724,34981],"class_list":["post-372520","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hot_off_the_press","category-news","tag-ccpa","tag-ccpa-penalties","tag-central-consumer-authority","tag-consumer-law","tag-consumer-protection-act-2019","tag-consumer-rights-india","tag-Delhi_High_Court","tag-hotel-and-restaurant-billing","tag-mandatory-service-charge-illegal","tag-national-consumer-helpline","tag-restaurants-service-charge","tag-service-charge-guidelines","tag-unfair-trade-practice"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>CCPA declares mandatory service charge illegal | SCC Times<\/title>\n<meta name=\"description\" content=\"CCPA penalizes 27 restaurants; 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Delhi High Court upholds CCPA Guidelines","author":"Arunima","date":"April 1, 2025","format":false,"excerpt":"The camouflaged and coercive manner in which service charge is being collected by the restaurant establishments itself shows the unlawful nature of the charge. This would clearly constitute an unfair trade practice under Section 2(47) of the CPA, 2019 as the collection of service charge materially misleads the consumer with\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Delhi High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=700%2C400&ssl=1 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Patil*","rel":"","context":"In &quot;OP. ED.&quot;","block_context":{"text":"OP. 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