Delhi, Five restaurants, Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation, were the targets of suo moto action by the Central Consumer Protection Authority (CCPA) on Tuesday for not returning mandatory service charges in spite of a Delhi High Court ruling.

In accordance with the Consumer Protection Act of 2019, the regulator has sent letters to the five eateries in the nation’s capital, instructing them to reimburse the service fee amounts.

As no hotel or restaurant shall require a customer to pay a service charge or collect a service charge from a customer under any other name, the Ministry of Consumer Affairs stated that this measure aims to lessen the excessive pressure on customers to pay extra money when using any restaurant.

In order to prevent unfair business practices and safeguard the rights of customers with relation to service fees in restaurants and hotels, the CCPA released rules in 2022.

According to the standards, no restaurant or hotel may automatically or by default include a service fee on the meal bill.

Additionally, they state unequivocally that no hotel or restaurant would compel a customer to pay a service fee or collect one under any other name. They also warn customers that service charges are optional, discretionary, and at their discretion.

According to the instructions, customers will not be subject to any restrictions on their ability to enter or receive services based on the collection of service charges, and service charges will not be collected by adding them to the meal bill and applying GST to the whole amount.

The Delhi High Court affirmed the CCPA’s service charge rules on Match 28, 2025. Following that, the CCPA learned through complaints filed on the National Consumer Helpline (1915) that some restaurants were still charging a mandatory service charge without getting customers’ prior consent, violating their rights as consumers and engaging in unfair business practices as defined by the Consumer Protection Act of 2019.