CCPA takes suo moto cognizance against 5 Delhi restaurants for non-refund of service charge

The North News

New Delhi, April 29

The Central Consumer Protection Authority (CCPA) 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 Deli High Court of Delhi. Notices have been issued under the Consumer Protection Act, 2019, directing the restaurants to refund the service charge amounts.

The action follows a ruling by the Delhi High Court on 28 March 2025, which upheld CCPA guidelines prohibiting hotels and restaurants from automatically adding service charges to food bills. Complaints lodged through the National Consumer Helpline revealed that several establishments continued to levy mandatory charges, in violation of the Consumer Protection Act, 2019.

In a statement, the CCPA said no hotel or restaurant should force consumers to pay a service charge or collect it under any other name. Businesses must also clearly inform customers that any service charge is voluntary.

Under the 2022 guidelines, restaurants are barred from:

• Adding service charges automatically or by default;
• Collecting service charges under alternative names;
• Conditioning entry or service on payment of such charges;
• Charging GST on a bill that includes service charges.

The CCPA was established under the Consumer Protection Act, 2019, to regulate unfair trade practices and protect consumer rights. Officials said the recent enforcement aims to ensure compliance and reduce undue pressure on consumers at restaurants across India.