If you notice a service charge automatically added to your restaurant bill, you have the right to question it.
The Central Consumer Protection Authority (CCPA) has taken action against 41 restaurants across India for allegedly adding service charges to customers’ bills without consent.
The government said the action was started after several complaints were received through the National Consumer Helpline (NCH).
Many customers submitted bills showing that service charges were added automatically even though they had not agreed to pay them.
Why Did CCPA Take Action Against Restaurants?
According to the CCPA, some restaurants violated consumer rights by applying service charges by default.
The authority said this practice goes against the Guidelines to prevent unfair trade practices and protect consumer interest regarding service charges in hotels and restaurants.
The CCPA stated that automatically adding a service charge without customer approval can be considered an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019.
The action follows a Delhi High Court judgment dated March 28, 2025, which upheld the validity of the CCPA’s service charge guidelines.
The court also observed that collecting service charges as a mandatory payment is not allowed under the law.
What Are Your Rights as a Customer?
The CCPA issued service charge guidelines on July 4, 2022, explaining what restaurants and hotels can and cannot do.
According to these rules:
Restaurants cannot automatically add a service charge to your bill.
They cannot collect service charges under any other name.
Customers cannot be forced to pay a service charge.
Restaurants must clearly inform customers that paying the charge is completely optional.
A restaurant cannot deny entry or refuse service if a customer chooses not to pay the service charge.
Service charges should not be included in the food bill amount.
GST cannot be charged on a service charge amount.
This means customers have the freedom to decide whether they want to pay a service charge or not.
Chaayos Fined ₹50,000 for Automatic Service Charge
In one of the cases, the CCPA imposed a ₹50,000 penalty on Sunshine Teahouse Pvt. Ltd., which operates Chaayos.
The company was also ordered to refund the service charge collected from the customer.
Additionally, Chaayos was directed to update its billing software across all outlets so that service charges or similar fees are not added automatically in the future.
The CCPA has also issued final orders against several other establishments, including:
Fiesta Barbeque Nation
China Gate Restaurant Pvt. Ltd.
L’Opera French Bakery Pvt. Ltd.
FOO Ahmedabad Restaurant
Cafe Blue Bottle
Zorro – The Luxury Night Club
Cases against other restaurants are still under review.
How Can Customers Report Violations?
The CCPA has encouraged customers to report restaurants that add service charges without approval.
Consumers can file complaints through the National Consumer Helpline (NCH) by:
Calling the toll-free number 1915
Using the NCH online platform
The authority has said it will continue monitoring complaints and take action against businesses that violate consumer protection rules.
Key Takeaway for Restaurant Customers
A service charge is optional, not mandatory.
Restaurants must inform customers clearly, and they cannot force anyone to pay it.
If a service charge is added automatically to your bill, you have the right to raise a complaint and seek a resolution.
