New Delhi: The Central Consumer Protection Authority (CCPA) on Tuesday said it has taken suo moto action against five restaurants — Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos and Fiesta by Barbeque Nation — for failing to refund mandatory service charges despite judgment held by the Delhi High Court.
The regulator has served notices to the five restaurants in the national capital under the Consumer Protection Act, 2019, directing the restaurants to refund the service charge amounts.
“This measure is aimed at reducing the undue pressure on Consumers to pay additional amount at the time of availing services at any Restaurant as no Hotel or Restaurant shall force a consumer to pay Service Charge or Service Charge shall not be collected from consumers by any other name,” said the Ministry of Consumer Affairs.
In 2022, CCPA issued guidelines to curb unfair trade practices and protect consumer interests regarding service charges in hotels and restaurants.
The guidelines stipulate that no hotels or restaurant shall add service charge automatically or by default in the food bill.
They also make it clear that no collection of service charge shall be done by any other name and no hotel or restaurant will force a consumer to pay service charge and will clearly inform the consumer that service charge is voluntary, optional and at consumer’s discretion.
No restriction on entry or provision of services based on collection of service charge will be imposed on consumers and service charge will not be collected by adding it along with the food bill and levying GST on the total amount, according to the guidelines.
On Match 28, 2025, the Delhi High Court upheld the CCPA guidelines on service charges. Subsequently, it came to the notice of the CCPA, through complaints received on the National Consumer Helpline (1915), that 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 indulged in unfair trade practices as per the Consumer Protection Act, 2019.
(IANS)
