Why Is the CCPA Taking Action Against Restaurants for Charging Service Fees Without Customer Consent?
The Central Consumer Protection Authority (CCPA) has initiated action against 41 restaurants across India for allegedly adding service charges to customers’ bills without obtaining their explicit consent.
Among the prominent restaurant chains facing scrutiny are Chaayos, Fiesta Barbeque Nation, L’Opera French Bakery, China Gate Restaurant Pvt. Ltd., FOO Ahmedabad Restaurant, Cafe Blue Bottle (Patna), and Zorro – The Luxury Night Club.
The action follows multiple consumer complaints received through the National Consumer Helpline (NCH), with authorities stating that automatically adding service charges violates consumer rights under the Consumer Protection Act, 2019.
Why Did the CCPA Launch the Investigation?
According to the Ministry of Consumer Affairs, several consumers complained that restaurants had included service charges in their bills by default without seeking their approval.
After reviewing invoices and customer complaints, the CCPA concluded that automatically levying service charges amounts to an unfair trade practice, as consumers must have the freedom to decide whether they wish to pay such charges.
The authority also cited the Delhi High Court’s judgment dated March 28, 2025, which upheld the validity of the CCPA’s service charge guidelines and ruled that mandatory collection of service charges is contrary to law.
Chaayos Penalised, Asked to Modify Billing System
The CCPA has imposed a ₹50,000 penalty on Sunshine Teahouse Pvt. Ltd., the company that operates Chaayos.
The authority directed the company to:
- Refund the service charge collected from the consumer.
- Modify its billing software across all outlets.
- Ensure service charges or similar fees are not added automatically.
- Comply with all CCPA service charge guidelines in future billing practices.
Apart from Chaayos, the CCPA has also passed final orders against Fiesta Barbeque Nation, China Gate Restaurant Pvt. Ltd., L’Opera French Bakery Pvt. Ltd., FOO Ahmedabad Restaurant, Cafe Blue Bottle, and Zorro – The Luxury Night Club.
Investigations involving the remaining restaurants are still ongoing.
What Do the CCPA Guidelines Say?
The CCPA reiterated that service charges are entirely voluntary and cannot be imposed automatically on customers.
Under the 2022 CCPA Guidelines for Hotels and Restaurants, establishments must follow these rules:
- Service charges cannot be added automatically to food bills.
- Restaurants cannot collect service charges under any alternative name.
- Customers cannot be compelled to pay service charges and must be informed that payment is optional.
- Restaurants cannot deny entry or refuse service if customers decline to pay a service charge.
- Service charges should not be bundled with the food bill for GST calculation.
The guidelines are intended to protect consumers from unfair billing practices and ensure transparency in restaurant pricing.
What Can Customers Do If a Service Charge Is Added?
Consumers who notice an unwanted service charge on their bill can first request the restaurant to remove it before making payment.
If the restaurant refuses, customers can file a complaint through the National Consumer Helpline (NCH) by calling 1915 or 8800001915.
They may also approach the appropriate consumer authorities for further redressal under the Consumer Protection Act.
What Does This Mean for Restaurants?
The latest enforcement action signals a stricter regulatory approach towards protecting consumer rights in India’s hospitality sector.
Restaurants will now need to ensure their billing systems fully comply with CCPA guidelines and avoid automatically adding service charges without customer approval.
For consumers, the move reinforces that service charges remain voluntary, and diners have the legal right to refuse payment without facing denial of service or additional pressure.
As proceedings continue against several other restaurants, the CCPA’s action is expected to encourage greater transparency and fair billing practices across the food service industry.
