In a significant move to protect consumer rights, India's Central Consumer Protection Authority (CCPA) has initiated decisive action against 27 prominent restaurants across the country. The crackdown targets establishments that have been illegally collecting a mandatory service charge from their customers, a practice deemed unfair and a violation of consumer rights.
The Nationwide Crackdown on Unfair Practices
The regulatory body, led by Chief Commissioner Nidhi Khare, has issued notices to these 27 dining outlets. This action follows numerous consumer complaints and the CCPA's own observations that many restaurants continue to add a service charge to food bills automatically, often without the customer's explicit consent. The authority has made it clear that levying such a charge is prohibited under the guidelines issued by the Department of Consumer Affairs.
The CCPA's stance is firm: a service charge cannot be imposed compulsorily. Consumers have the right to decide whether to pay a tip or a service charge, and how much. Any addition of this charge to the bill by default, or making its payment a condition for placing an order or making a payment, constitutes an unfair trade practice. The notices demand a detailed explanation from the restaurants regarding their practice of collecting the charge.
Understanding Your Rights as a Diner
This enforcement action reinforces critical guidelines for both consumers and the hospitality industry. According to the CCPA, restaurants and hotels must adhere to the following rules. First, no service charge can be added automatically or by default to a food bill. Second, the charge cannot be collected under any other name. Third, a customer cannot be forced to pay it. Finally, service charge must not be included in the bill's total amount, and no GST should be applied to it.
If a restaurant violates these rules, consumers are empowered to take action. Patrons can first request the restaurant to remove the charge from their bill. If the establishment refuses, the consumer can lodge a complaint with the National Consumer Helpline (NCH) by calling 1915 or using the NCH mobile app. A complaint can also be filed directly with the Consumer Commission or through the dedicated edaakhil.nic.in portal for swift online grievance redressal.
Implications and the Path Forward
The action against these 27 restaurants sends a strong message to the entire hospitality sector. The CCPA has warned that failure to comply with the guidelines will lead to punitive measures under the Consumer Protection Act, 2019. Potential penalties include hefty fines and even the cancellation of a restaurant's license. This proactive step aims to curb a widespread malpractice and ensure that consumers are not forced to pay hidden or mandatory charges.
This development is a major win for consumer advocacy in India. It empowers diners to question unfair billing practices and reinforces that tipping should be a voluntary reward for good service, not a compulsory fee. The CCPA's vigilance is expected to bring more transparency to restaurant billing across the nation, making dining out a fairer experience for everyone.
