{"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 v27.4 (Yoast SEO v27.4) - 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