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Govt issues notices to Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation, asking them to refund service charges got unlawfully from customers.
On March 28, 2025, the Delhi High Court upheld the CCPA’s guidelines, ruling that service charges cannot be imposed without the customer’s prior consent.
Despite clear rules and a recent Delhi High Court ruling, several restaurants in Delhi have continued to impose mandatory service charges on customers — without consent — and refused refunds upon request. This move has landed them in trouble, with the Central Consumer Protection Authority (CCPA) stepping in.
According to a press release by PIB Delhi dated April 29, 2025, the Ministry of Consumer Affairs has taken suo moto cognisance of the violation and issued notices to Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation, asking them to refund the service charges collected unlawfully from customers.
In the press release, the CCPA said, “The Central Consumer Protection Authority (CCPA) has taken suo moto action against five restaurants…for failing to refund mandatory service charges despite a judgment held by the Hon’ble High Court of Delhi.”
The crackdown follows rising complaints on the National Consumer Helpline (1915) from diners being forced to pay service charges and denied refunds.
The Ministry further stated, “This measure is aimed at reducing the undue pressure on consumers to pay an additional amount at the time of availing services at any restaurant, as no hotel or restaurant shall force a consumer to pay service charges or service charges shall not be collected from consumers by any other name.”
What Do the Rules Say?
The Central Consumer Protection Authority (CCPA), established under Section 10 of the Consumer Protection Act, 2019, had issued guidelines on July 4, 2022, to protect diners from unfair billing practices. The guidelines clearly mention:
Service charges cannot be added automatically or by default to the bill.
They must not be collected under any other name.
Payment of service charge is completely voluntary and up to the consumer.
Restaurants must not deny services if the consumer refuses to pay it.
Service charges must not be clubbed with the bill for GST calculation.
What Did the Delhi High Court Say?
On March 28, 2025, the Delhi High Court upheld the CCPA’s guidelines, ruling that service charges cannot be imposed without the customer’s prior consent. Yet, complaints continued, prompting the latest action.
What Can You Do If You Are Still Asked To Pay Service Charge?
According to the CCPA guidelines, if a consumer finds that a hotel or restaurant is levying a service charge in violation of the guidelines:
1) The consumer may make a request to the concerned hotel or restaurant to remove the service charge from the bill amount;
2) The consumer may lodge a complaint on the National Consumer Helpline (NCH), which works as an alternate dispute redressal mechanism at the pre-litigation level by calling 1915 or through the NCH mobile app;
3) The consumer may also file a complaint against the unfair trade practice with the Consumer Commission. The complaint can also be filed electronically through e-daakhil portal www.e-daakhil.nic.in for its speedy and effective redressal;
4) The consumer may also submit a complaint to the District Collector of the concerned district for investigation and subsequent proceeding by the CCPA
5) The complaint may also be sent to the CCPA by e-mail at com-ccpa@nic.in.
