CCPA acts against 27 restaurants for mandatory service charge, calls it an unfair trade practice
The Central Consumer Protection Authority (CCPA) said on 10 January 2026 that it had taken suo motu cognizance against 27 restaurants for levying service charge by default, an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019, with penalties of up to ₹50,000 and refund orders.
Summary
The Central Consumer Protection Authority (CCPA) took suo motu cognizance against 27 restaurants across the country for automatically adding service charge to food bills, treating it as an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019. The action followed complaints on the National Consumer Helpline backed by invoices; penalties of up to ₹50,000 were imposed and restaurants were told to refund the charge and change their billing systems. Café Blue Bottle (Patna) and China Gate Restaurant (Bora Bora), Mumbai, were among those levying a default 10% charge. The CCPA's service charge guidelines of 4 July 2022 bar automatic or renamed service charges, and the Delhi High Court upheld them in a judgment dated 28 March 2025.
Key facts
- Authority
- Central Consumer Protection Authority (CCPA)
- Action
- Suo motu cognizance against 27 restaurants
- Legal basis
- Unfair trade practice — Section 2(47), Consumer Protection Act, 2019
- Penalty
- Up to ₹50,000; refund and billing changes ordered
- Trigger
- Complaints on National Consumer Helpline (NCH) with invoices
- Guidelines
- CCPA service charge guidelines, 4 July 2022
- Court
- Delhi High Court upheld guidelines, judgment of 28 March 2025
Practice MCQs 3 questions
Against how many restaurants did the CCPA take suo motu cognizance in January 2026 for levying mandatory service charge?
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Correct answer: B — 27
PIB (Consumer Affairs): the CCPA took suo motu cognizance against 27 restaurants across the country.
Under which provision of the Consumer Protection Act, 2019 did the CCPA treat default service charge as an unfair trade practice in January 2026?
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Correct answer: D — Section 2(47)
PIB (Consumer Affairs): the action was for unfair trade practices under Section 2(47) of the Consumer Protection Act, 2019.
Consider the following statements about the CCPA's guidelines on service charge, as cited in January 2026: 1. The guidelines were issued on 4 July 2022. 2. They allow service charge if it is collected under a different name. 3. The Delhi High Court upheld them in a judgment dated 28 March 2025. Which of the statements given above is/are correct?
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Correct answer: B — 1 and 3 only
PIB (Consumer Affairs): the guidelines were issued on 4 July 2022 and were upheld by the Delhi High Court on 28 March 2025; they say no service charge shall be collected by any other name, so statement 2 is wrong.