Central Consumer Protection Authority Takes Action Against Restaurants for Failing to Refund Service Charges

The Central Consumer Protection Authority (CCPA) has taken suo motu action against five restaurants operating in the city for allegedly failing to refund service charges despite a recent judgment by the Delhi High Court. The authority has issued notices to Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation under the Consumer Protection Act, 2019. The action came following complaints on its consumer helpline portal. The CCPA officials said that the measure is aimed at reducing the undue pressure on consumers to pay additional amounts at the time of availing services at restaurants or hotels—a contentious issue that has become a legal matter and is being strongly challenged by restaurant and hotel bodies.

The guidelines issued by CCPA state that no hotels or restaurants will add service charge automatically or by default in the food bill; no collection of service charge will be done by any other name; no hotel or restaurant will force a consumer to pay service charge, and will inform the consumer that service charge is voluntary, optional, and at the consumer's discretion. It added that no restriction on entry or provision of services will be based on the collection of service charge, and the same will not be collected by adding it along with the food bill and levying GST on the total amount.