New Delhi: The practice of automatically adding a service charge to restaurant and hotel bills has been deemed a violation of consumer rights. As per guidelines issued by the Central Consumer Protection Authority (CCPA) and court directions, levying a service charge without the customer’s consent is an unfair trade practice and can attract a penalty of up to ₹50,000.
In recent months, multiple cases have surfaced where eateries added a 5%–10% service charge by default, without informing diners. Under the current rules, this is not permissible.
What the rules say
According to the CCPA’s 2022 guidelines and subsequent judicial directions:
- Service charge cannot be added automatically to the bill
- It cannot be collected without the customer’s explicit consent
- It cannot be levied under any alternative name such as “staff welfare charge”
- A restaurant cannot refuse service if a customer declines to pay it
- GST cannot be imposed on a forced service charge
Authorities have already imposed penalties on several establishments for violations up to January 2026.
Service charge vs tip
A service charge is a fee added by the restaurant to the bill, whereas a tip is entirely voluntary and left to the customer’s discretion. Diners are free to tip—or not—based on their satisfaction with the service.
Always check your bill
Customers should carefully review the bill for any service charge and its percentage. If it has been added without consent, they have the right to ask for its removal. Keeping a copy or photo of the bill can help while filing a complaint.
How to file a complaint
If a restaurant forces you to pay a service charge, you can lodge a complaint with the National Consumer Helpline:
Phone: 1915, WhatsApp: 8800001915
Once a complaint is registered, authorities can investigate and impose penalties on the establishment if violations are confirmed.
Your legal protection
Under the Consumer Protection Act, 2019, customers cannot be compelled to pay unfair charges. Experts say awareness is the most effective way to curb such practices.
In short, paying a service charge is your choice—not the restaurant’s rule. If you refuse, the charge must be removed, and forced recovery can lead to regulatory action.
