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Mandatory Levy of Service Charge by Restaurants Violates Consumer Law: CCPA Automatic Addition of Service Charge Declared Unfair Trade Practice Penalties imposed up to ₹50,000; restaurants directed to refund service charge and modify billing systems Action triggered by consumer complaints on Na
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FAQ :
No, the Central Consumer Protection Authority (CCPA) has ruled that the mandatory levy of service charge by restaurants is illegal and an unfair trade practice.
The CCPA has taken action against 27 restaurants for violating consumer rights by automatically adding service charges. They have been directed to refund charges and face penalties.
No, restaurants cannot add service charge automatically or by default. Consumers must be clearly informed that paying service charge is voluntary and optional.
Restaurants found levying service charges illegally can be directed to refund the amount to the consumer, pay a penalty of up to ₹50,000, and modify their billing systems.
The CCPA initiated action based on consumer complaints received on the National Consumer Helpline (NCH), supported by invoices that showed the default addition of service charge.
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