The Central Consumer Protection Authority (CCPA) has initiated action against 41 restaurants nationwide for illegally levying service charges by default, with Chaayos receiving a ₹50,000 penalty.
41
Restaurants Targeted
⏳ Time Machine
How today’s news fits into the bigger picture
July 4, 2022
CCPA Issues Service Charge Guidelines
The Central Consumer Protection Authority issued guidelines explicitly stating that hotels and restaurants cannot add service charges automatically or by default to food bills, nor can they compel consumers to pay.
March 2025
Delhi High Court Upholds Guidelines
The Delhi High Court, in the case of National Restaurant Association of India & Ors. v. Union of India & Anr., upheld the validity of the CCPA's service charge guidelines, affirming that mandatory collection is illegal.
March 2025
Customer Complaint Against Chaayos
A customer lodged a complaint with the National Consumer Helpline against a Chaayos outlet for levying a service charge and refusing a refund, initiating the 'suo motu' case that led to today's penalty.
February 2026
CCPA Fines 27 Restaurants
The CCPA took action against 27 restaurants for continuing to levy mandatory service charges, imposing penalties and ordering refunds, indicating an ongoing enforcement drive before the current, larger crackdown.
May 1, 2025
Chaayos Discontinues Service Charges (Claim)
Chaayos informed the CCPA that it had discontinued service charges across all its outlets and ordering platforms from May 1, 2025. However, investigations found charges continued, leading to the penalty.
Today
CCPA initiated action against 41 restaurants for illegally levying service charges, including a ₹50,000 fine for Chaayos.
What happens next?
The CCPA will continue to monitor billing practices, and more restaurants are expected to face action or adjust their systems to comply with the voluntary service charge guidelines.
The Central Consumer Protection Authority (CCPA) has taken 'suo motu' action against 41 restaurants across India for continuing to levy service charges automatically on customer bills. This crackdown follows numerous complaints received via the National Consumer Helpline, indicating widespread non-compliance despite clear guidelines and a Delhi High Court ruling affirming that service charges are voluntary. In one notable case, the CCPA imposed a penalty of **₹50,000** on Chaayos (Sunshine Teahouse Pvt. Ltd.) and ordered it to refund the collected charge and modify its billing software. The authority continues to monitor compliance and protect consumer rights.
💭 If you're wondering…
'Suo motu' is a Latin term meaning 'on its own motion.' In this context, it means the CCPA initiated the action against the restaurants without needing a formal complaint from a specific individual, though it was based on numerous complaints received.
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