Chaayos, Barbeque Nation among eateries under CCPA lens over service charge

The CCPA has said service charges are voluntary and cannot be imposed by default, collected under another name, or bundled with food bills

  At least 41 restaurants across are facing the scrutiny of the Central Consumer Protection Authority (CCPA) for allegedly adding service charges to customers' bills without their explicit consent.

 

Prominent restaurants facing action include Chaayos, Fiesta Barbeque Nation, L'Opera French Bakery, China Gate Restaurant Pvt. Ltd., FOO Ahmedabad Restaurant, Cafe Blue Bottle in Patna, and Zorro – The Luxury Night Club.

 

Why has the CCPA taken action?

 

According to the Ministry of Consumer Affairs, the action was triggered after consumers lodged complaints through the National Consumer Helpline (NCH). The complaints included invoices that allegedly showed service charges being added by default without customers agreeing to pay them.

 

 

Following its investigation, the consumer watchdog concluded that automatically levying a service charge amounts to an unfair trade practice under the Consumer Protection Act, 2019 because customers must have the freedom to decide whether they want to pay it.

 

The ministry also referred to the Delhi High Court's judgment dated March 28, 2025, which upheld the validity of the CCPA's service charge guidelines. The court held that the mandatory collection of service charges is contrary to law and said that restaurants must comply with the guidelines.

 

Chaayos fined, asked to change billing software

 

The CCPA imposed a penalty of ₹50,000 on Sunshine Teahouse Pvt. Ltd., which operates Chaayos, and directed the company to refund the service charge collected from the consumer. It also ordered the company to modify its software-generated billing system across all outlets so that service charges, or similar charges, are not added automatically. The authority further directed the company to ensure that all future bills comply with the consumer protection guidelines.

 

Final orders have also been issued 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. Proceedings against the remaining restaurants are still underway.

 

What do the rules say?

 

The CCPA reiterated that a service charge is voluntary and cannot be imposed by default. Under its 2022 guidelines for hotels and restaurants:

 

• Service charges cannot be added automatically to food bills
• Restaurants cannot collect the charge under a different name
• Consumers cannot be forced to pay a service charge and must be informed that it is optional
• Restaurants cannot deny entry or services to customers who refuse to pay it
• Service charges should not be bundled with the food bill and subjected to GST

 

What can customers do?

 

Consumers who find a service charge added without their consent can ask the restaurant to remove it before making payment. If the issue is not resolved, they can lodge a complaint through the National Consumer Helpline (1915 or 8800001915) or approach consumer authorities for redressal.