Mandatory service charge declared illegal across all the restaurants in the country

Centre declares mandatory service charges illegal. CCPA penalizes 27 restaurants, including Barbeque Nation, for default billing

The Centre has reiterated that restaurants across India cannot impose a mandatory service charge on food bills, calling the practice a violation of consumer protection laws. The Ministry of Consumer Affairs confirmed that the Central Consumer Protection Authority (CCPA) has initiated action against several establishments for continuing to levy the charge by default, despite clear guidelines and a Delhi High Court ruling upholding the ban.

As part of the enforcement drive, popular chain Barbeque Nation was directed to stop collecting service charges after a complaint revealed an additional fee added to its bill. Officials stressed that compulsory service charges amount to an unfair trade practice under the Consumer Protection Act, 2019.

The CCPA guidelines prohibit restaurants from automatically adding service charges, collecting them under substitute names, or pressuring diners to pay. The Delhi High Court, in March 2025, upheld these rules, confirming that customers cannot be forced to accept such charges. Restaurants must also clearly state that any service charge is voluntary.

Key provisions include: no default addition of service charges, no collection under alternative names, refusal to pay cannot result in denial of service, and GST cannot be applied to unlawful charges.

Also Read: Why Bengaluru’s iconic Lumbini Garden is shut: Lake drained for ₹18-crore rejuvenation works

Nationwide inspections revealed violations at 27 restaurants, many of which added a flat 10 percent to bills without consent and, in some cases, charged GST on the amount. Penalized outlets were ordered to refund customers and remove automatic billing practices.

Officials noted that despite the court ruling, several restaurants continued the practice in multiple cities. The CCPA has warned of further action if compliance is not ensured.

For diners, the rules mean they can demand removal of unauthorized service charges, refuse payment entirely, and seek refunds. Complaints can be filed through the National Consumer Helpline, which has already triggered enforcement in several cases. Authorities have urged consumers to report violations promptly so that repeat offenders can be penalized.

This crackdown signals a strong push to protect consumer rights and ensure transparency in restaurant billing practices across India.

Also Read: Bharat Bandh: Trade Unions call nationwide strike against labour codes