Five Delhi Restaurants Fail To Refund Service Charges, CCPA Resorts To Suo Moto Action

New Delhi: The Central Consumer Protection Act (CCPA) has taken suo moto action against five restaurants of Delhi for failing to refund mandatory service charges despite judgment held by High Court of Delhi, the Ministry of consumer affairs announced in an official statement on Tuesday

According to Ministry of Consumer Affairs, Food & Public Distribution, notices have been issued under the Consumer Protection Act, 2019, directing the restaurants to refund the service charge amounts.

The five restaurants include Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation.

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.

On March 28, 2025, the Delhi High Court upheld the CCPA guidelines on service charges.

Subsequently, it came to the notice of the Central Consumer Protection Authority (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.

CCPA issued guidelines on July 4, 2022, 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, no collection of service charge shall be done by any other name, no hotel or restaurant shall force a consumer to pay service charge and shall 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 shall be imposed on consumers, service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.

CCPA was established under Section 10 of the Consumer Protection Act, 2019. Its primary mandate is to regulate matters related to the violation of consumer rights, unfair trade practices, and false or misleading advertisements that are detrimental to the interests of the public and consumers at large. (ANI)

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