Bill of Rights: CCPA Charges 41 Restaurants Over Added Fees

The Central Consumer Protection Authority has launched a national crackdown on restaurants automatically levying service charges, penalizing major chains for unfair trade practices.

The Central Consumer Protection Authority (CCPA) has initiated suo motu action against 41 restaurants across India for violating consumer rights by automatically adding service charges to food bills. This regulatory move, confirmed in an official statement on Sunday, July 19, 2026, marks a significant escalation in the government's effort to protect diners from mandatory, non-consensual fees.

The investigation was triggered by numerous complaints received via the National Consumer Helpline (NCH), where consumers submitted invoices as evidence that restaurants were embedding service charges into their billing software without explicit customer consent.

Enforcement and Penalties

The CCPA has already issued final orders against several prominent establishments, signaling a zero-tolerance policy toward the practice. Among those penalized is Chaayos (Sunshine Teahouse Pvt. Ltd.), which was fined ₹50,000. The authority has directed the company to reimburse the service charge to the complaining consumer and mandated a complete overhaul of its billing software to ensure that no such charge is added by default across any of its outlets.

Final orders were also passed against other notable entities, including:

• Barbeque Nation (Fiesta Barbeque Nation)

• China Gate Restaurant Pvt. Ltd.

• L’Opera French Bakery Private Limited

• FOO Ahmedabad Restaurant

• Cafe Blue Bottle, Patna

• Zorro – The Luxury Night Club

The CCPA has confirmed that proceedings are currently underway against the remaining restaurants identified in the investigation.

Legal Basis for the Crackdown

This regulatory enforcement is rooted in the "Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants," issued on July 4, 2022. These guidelines were further strengthened by a Delhi High Court judgment on March 28, 2025, which upheld the regulations and reaffirmed that mandatory service charge collection is contrary to law.

According to the CCPA guidelines, service charges are strictly voluntary. Restaurants are prohibited from:

• Adding service charges automatically or by default to food bills.

• Collecting service charges under any other name.

• Forcing consumers to pay service charges or restricting entry/service based on a customer's refusal to pay.

• Levying GST on service charges.

Quote Section

"Reaffirming that service charge is voluntary and entirely at the consumer's discretion, the CCPA has imposed penalties on violators, taken action against restaurants violating consumer protection law, and directed them to discontinue the automatic levy of service charge," said Union Minister of Consumer Affairs Pralhad Joshi.

Why It Matters

For consumers, this crackdown offers significant financial relief and clarity during dining experiences. The practical implication is that diners are no longer obligated to pay these "default" fees. If a restaurant persists in adding them, consumers now have a clear path for recourse, as the CCPA continues to monitor and process complaints via the National Consumer Helpline (1915).

Key Facts at a Glance

• National Action: 41 restaurants are currently under scrutiny for illegal billing practices.

• Violations: Automatic addition of service charges without explicit customer consent is classified as an "unfair trade practice" under the Consumer Protection Act, 2019.

• Reporting: Consumers can report violations by calling the toll-free number 1915 or using the NCH platform.

• Legal Standing: The 2022 CCPA guidelines were legally upheld by the Delhi High Court in March 2025.

FAQ

Is a service charge mandatory in restaurants? No. The CCPA guidelines state that service charges are strictly voluntary, optional, and entirely at the consumer's discretion.

What should I do if a restaurant adds a service charge to my bill by default? You can ask the restaurant to remove the charge. If they refuse, you can file a complaint with the National Consumer Helpline (NCH) by calling 1915 or visiting their official website.

Can a restaurant deny me service if I refuse to pay a service charge? No. The guidelines explicitly state that restaurants cannot impose restrictions on entry or the provision of services based on a consumer’s refusal to pay a service charge.

Source: Central Consumer Protection Authority (CCPA), Press Information Bureau (PIB), The Economic Times, NDTV Profit