Service Charge Row: CCPA Takes Action Against 41 Restaurants Across India

The CCPA has taken action against 41 restaurants, including Chaayos, over the automatic levy of service charges, noting that such charges must remain voluntary and cannot be added to bills by default.

The guidelines also state that no restriction on entry or on the provision of services shall be imposed on consumers for not paying a service charge.

Source : ABPLIVE AI

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Key points generated by AI, verified by newsroom

• CCPA acted against 41 restaurants for default service charge.
• Action followed consumer complaints regarding automatic billing practices.
• Chaayos received Rs 50,000 fine for automatic service charge.

New Delhi, July 19 (IANS) The Central Consumer Protection Authority (CCPA) has initiated suo motu action against 41 restaurants across the country for violation of consumer rights and adoption of unfair trade practices by levying service charge by default on consumers’ bills, according to an official statement issued on Sunday.

The action has been taken based on complaints received through the National Consumer Helpline (NCH). The complaints were supported by invoices showing that service charge had been automatically added to consumers’ bills without obtaining their explicit consent.

Based on these complaints, CCPA conducted investigations and found that the automatic levy of service charge violated the Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest about Levy of Service Charge in Hotels and Restaurants.

In one such case, CCPA passed a final order against Chaayos (Sunshine Teahouse Pvt. Ltd.), imposing a penalty of Rs 50,000 for levying service charge by default and directing the company to reimburse the service charge collected from the consumer.

The company has also been directed to modify its software‑generated billing system across all its outlets to ensure that a service charge or any similar charge is not automatically added to consumers’ bills.

The other restaurants that CCPA has passed final orders against include Cafe Blue Bottle, Patna; China Gate Restaurant Pvt. Ltd.; Fiesta Barbeque Nation (Barbeque Nation Hospitality Private Limited); FOO Ahmedabad Restaurant; L’Opera French Bakery Private Limited; and Zorro – The Luxury Night Club.

Further proceedings are also underway against other restaurants where complaints have been received and examined.

The Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest about Levy of Service Charge in Hotels and Restaurants, issued on 4 July 2022, provide that no hotel or restaurant shall automatically or by default add a service charge to the food bill. No hotel or restaurant shall force a consumer to pay a service charge and must clearly inform consumers that it is voluntary, optional, and entirely at the consumer’s discretion.

The guidelines also state that no restriction on entry or on the provision of services shall be imposed on consumers for not paying a service charge.

CCPA encourages consumers to report instances where restaurants levy service charge by default through the National Consumer Helpline by calling 1915 (toll‑free) or through the NCH platform.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)