The Central Consumer Protection Authority (CCPA) has taken suo motu action against five restaurants in Delhi for failing to refund mandatory service charges despite a judgment held by the Delhi High Court.

These restaurants were Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation.

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Notices have been issued under the Consumer Protection Act, 2019, directing the restaurants to refund the service charge amounts.

While issuing the order, the CCPA said ”this measure is aimed at reducing the undue pressure on Consumers to pay additional amounts at the time of availing services at any Restaurant, as no Hotel or Restaurant shall force a consumer to pay Service Charge or Service Charge shall not be collected from consumers by any other name”.

It is to be highlighted that the CCPA issued guidelines in 2022 to curb unfair trade practices and protect consumer interests regarding service charges in hotels and restaurants.

These guidelines stipulate that no hotels or restaurants shall add a service charge automatically or by default to the food bill. Further, no collection of service charges shall be done by any other name.

It has also said that no hotel or restaurant shall force a consumer to pay the service charge and shall clearly inform the consumer that the service charge is voluntary, optional, and at the consumer’s discretion.

As per the guidelines, no restriction on entry or provision of services based on the collection of service charges shall be imposed on consumers.

Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.