That extra service charge quietly slipped into a restaurant bill has now landed dozens of eateries in trouble. The Central Consumer Protection Authority (CCPA) has taken firm action against 41 restaurants and imposed penalties on them for levying the charge. What stands out is that the authority moved on its own, taking suo motu cognizance of the matter rather than waiting for a formal case to build up.
The government had long ago made it clear that restaurants must not collect any service charge from customers. Despite that instruction, complaints kept pouring in, and it was on the strength of these grievances that the sweeping action was finally taken. The authority holds that adding this amount to a bill without the customer's consent is a direct violation of consumer rights and amounts to an unfair trade practice.
What the Minister Said
According to Consumer Affairs Minister Pralhad Joshi, paying a service charge rests entirely on the customer's own choice and is purely voluntary. “Service charge is voluntary and completely at the discretion of the consumer,” he said. Joshi explained that the entire crackdown was built on complaints received through the National Consumer Helpline (NCH). Every erring restaurant has been directed to immediately switch off the automatic levy of service charge on bills.
Chaayos Fined Rs 50,000
Among the 41 restaurants that faced the action is a well-known name, the popular tea cafe Chaayos. It has been slapped with a penalty of Rs 50,000. The CCPA has ordered that customers who were charged the service fee must be refunded that money. Alongside this, the authority has told Chaayos to overhaul the software-generated billing system across all its outlets, so that the charge can no longer attach itself automatically to anyone's bill.
Others Named in the Order
Besides Chaayos, the businesses against which orders were passed include Patna's Cafe Blue Bottle, China Gate Restaurant Private Limited, Fiesta Barbeque Nation, Ahmedabad's FOO Restaurant, L'Opera French Bakery Private Limited and Zoro The Luxury Night Club. In its statement, the ministry said that wherever complaints have come in and their examination is complete, further action against the remaining restaurants is already underway.
Ignoring the 2022 Rules
The probe found that all these restaurants had ignored the guideline issued in 2022 governing service charges in hotels and restaurants. The directions, issued on July 4, 2022, stated plainly that no restaurant could collect a service charge without the customer's consent. The Delhi High Court had also upheld these rules. In the court's view, collecting the fee without asking is an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019. The High Court further observed that a service charge has no legal basis.
Where Customers Can Complain
The authority has stated in no uncertain terms that no restaurant can extract a service charge from a customer by concealing it or applying pressure. Refusing to serve someone simply because they declined to pay the fee has also been deemed wrong. The CCPA reiterated that paying or not paying this amount depends entirely on the customer. If any restaurant forces or deceives a customer into paying a service charge, the aggrieved person can register a complaint by calling the toll-free NCH number, 1915.
