The Central Consumer Protection Authority (CCPA) has initiated action against 41 restaurants for allegedly adding service charges to customers’ bills automatically. As per the applicable consumer protection guidelines, service charge is voluntary and cannot be imposed by default or collected without clear prior disclosure to the consumer.

Restaurants cannot force customers to pay such charges, nor deny entry or service if the customer refuses to pay. Any compulsory levy of service charge may amount to an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019.

Consumer Note: Always check your bill carefully—service charge is not a compulsory tax.

The Central Consumer Protection Authority (CCPA) has initiated suo motu action against 41 restaurants for automatically adding service charges to customers’ bills.

Under the CCPA Guidelines, a hotel or restaurant:

• cannot levy a service charge automatically or by default;
• cannot compel a customer to pay it;
• cannot restrict entry or service merely because the customer refuses to pay; and
• must clearly inform customers that payment of any service charge is voluntary.

Mandatory levy may constitute an “unfair trade practice” under Section 2(47) of the Consumer Protection Act, 2019. Consumers may ask the restaurant to remove the charge and lodge a grievance through the National Consumer Helpline where necessary. 

Consumer Alert: Check the bill before making payment—service charge is not a compulsory tax.

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