Mumbai: Mumbai-based China Gate Restaurant Private Limited, which operates the Bora Bora restaurant, has been penalised Rs 50,000 by the Central Consumer Protection Authority (CCPA) for including a service charge by default in customer bills, in violation of consumer protection guidelines.
The action followed a complaint filed by a Mumbai resident who was charged a 10 per cent service charge amounting to Rs 624 during a visit to the restaurant in April. The complainant alleged that the service charge was added automatically to the bill, over and above the cost of food and Goods and Services Tax (GST). He further claimed that when he requested the removal of the service charge, the restaurant refused, forcing him to pay the amount. The complainant also pointed out that the service charge was levied on the GST component as well.
After examining the grievance and the bill submitted by the complainant, the CCPA found the allegations to be valid. In its order dated December 29, the authority cited a March ruling of the Delhi High Court, which upheld the CCPA’s guidelines and declared the mandatory levy of service charge as contrary to law and against consumer interest.
“Despite the Hon’ble High Court of Delhi validating the applicability of the CCPA guidelines, which are in the interest of consumers, and declaring the levy of any service charge by default in a bill as contrary to law, the restaurant has levied service charge by default in the bill,” the CCPA order stated.
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The authority also noted that the restaurant failed to appear for proceedings despite being given adequate opportunities and did not initially furnish the required information. While the restaurant later informed the CCPA that it had discontinued the levy of service charge with immediate effect, the authority observed that its software-based billing system had automatically generated bills with service charges for all customers between March 28 and April 30, 2025.
“This gives an implication that the restaurant must have collected a substantial amount of service charge across all its three outlets in Mumbai during the said period,” the order said.
The CCPA has directed the restaurant to immediately modify its billing software to ensure that no service charge, or any charge by any other name, is added by default to customer bills.
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