Government Declares Default Service Charge Illegal, Says Diners Cannot Be Forced To Pay Extra Fees

Being forced to pay an additional service charge at restaurants is a common issue we all have faced. But it’s a relief for all of us, as the government has now stepped in and announced that restaurants cannot make customers pay a service charge by default. Read on more to know government guidelines on service charges.

No Mandatory Service Charge

Now you can directly refuse to pay any additional service charge on your total bill, and no restaurant can force you. According to the Deccan Herald, on Tuesday, the Ministry of Consumer Affairs, Food & Public Distribution stated that charging a mandatory service charge on food bills is against the consumer laws, and restaurants practising this are liable to penalties.

Acting on multiple complaints, the Central Consumer Protection Authority has charged 27 restaurants across India for automatically adding these charges to the total bill. They called the practice unfair and a breach of consumer rights under the Consumer Protection Act, 2019. This action is also backed by the Delhi High Court firm, stating that restaurants must follow the rules laid down by the authorities to avoid any penalties.

Restaurants That Were Fined By The Government

Many famous restaurants, like China Gate and Bora Bora in Mumbai and Café Blue Bottle in Patna, among others, have been fined ₹50,000 and ₹30,000, respectively, for violating the Consumer Protection Act, 2019, and the CCPA guidelines by adding a 10% mandatory service charge.

The Delhi High Court approved the CCPA guidelines, which state that adding a compulsory service charge by restaurants is against the law. The guidelines declare that no hotel or restaurant shall add a service charge automatically or by default to the food bill. Additionally, no service charge can be collected by any other name, and customers cannot be forced to pay these charges at any cost.

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All You Need To Know About The CCPA Guidelines

The National Consumer Helpline also released a response to all the complaints they had received. They have asked the restaurants to refund the full amount charged on the bill. They have also asked these restaurants to discontinue the practice with immediate effect; failing to do so will lead to penalties.

The CCPA is keeping a close watch on service charge-related complaints and has promised to continue taking action against such restaurants that ignore consumer protection laws. Furthermore, the government has also urged consumers to report violations and unfair practices.

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Now you can dine in at any restaurant without worrying about hefty service charges.

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