CCPA Takes Action Against Five Delhi Restaurants for Failing to Refund Service Charges

New Delhi: The Central Consumer Protection Authority (CCPA) has taken action against five restaurants in Delhi — Makhna Deli, Zero Courtyard, Castle Barbecue, Chaayos, and Fiesta by Barbeque Nation — for failing to refund mandatory service charges despite a Delhi High Court order.

Notices have been issued to these establishments under the Consumer Protection Act, 2019, directing them to refund the collected service charges.

The CCPA had earlier issued guidelines on July 4, 2022, regarding service charges in hotels and restaurants, aimed at protecting consumer interests. According to these guidelines, no hotel or restaurant is allowed to add service charges automatically or by default to the bill. Furthermore, service charges cannot be collected under any other name.

Consumers must be clearly informed that paying a service charge is optional and completely at their discretion. Additionally, no restaurant or hotel may restrict entry or provision of services based on the payment of a service charge.

It is noteworthy that on March 28, 2025, the Delhi High Court upheld the CCPA’s guidelines on service charges. Following this, the CCPA received numerous complaints via the National Consumer Helpline (1915), reporting that some restaurants were imposing mandatory service charges without obtaining prior consent from customers.

The CCPA was established to regulate issues related to the violation of consumer rights, unfair trade practices, and misleading advertisements.