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Central Consumer Protection Authority (CCPA) | Ministry of Consumer Affairs, Food & Public Distribution
On January 10, 2026, the Central Consumer Protection Authority (CCPA) took suo motu cognizance against 27 restaurants across India for the mandatory levy of service charges, declaring the practice an “Unfair Trade Practice” under the Consumer Protection Act, 2019. This enforcement follows a landmark Delhi High Court judgment on March 28, 2025, which upheld CCPA guidelines and affirmed that mandatory collection of service charges by restaurants is contrary to law.
The investigation, triggered by complaints on the National Consumer Helpline (NCH), revealed widespread violations:
Illegal Defaults: Many restaurants were found to be automatically adding a 10% service charge to food bills without consumer consent.
Prohibited Practices: Under the CCPA Guidelines, restaurants cannot add service charges by default, call them by any other name, or restrict entry based on a consumer’s refusal to pay.
Strict Penalties: The CCPA has imposed penalties of up to ₹50,000, ordered full refunds to affected consumers, and directed establishments to modify their billing software to remove automatic additions.
GST Violation: Guidelines explicitly state that service charges should not be added to the bill and subjected to GST, as it artificially inflates the tax liability for consumers.
What is ‘Suo Motu’ cognizance in the context of CCPA? It refers to the authority’s power to take action on its own initiative without waiting for a formal complaint from an individual consumer. Under the Consumer Protection Act, 2019, the CCPA can investigate matters of “Unfair Trade Practices” or “Violation of Consumer Rights” as a class, allowing it to penalize systemic issues across an entire industry—such as the restaurant sector—rather than just resolving one-off disputes.
Policy Relevance
The CCPA’s aggressive stance signals a shift toward proactive market regulation and the strengthening of the Digital Consumer Grievance ecosystem.
Strategic Impact for India:
Empowering the National Consumer Helpline (NCH): By using NCH data and uploaded invoices as primary evidence for penalties, the government is validating digital grievance tools as effective instruments of justice.
Ease of Living: Eliminating mandatory, hidden charges directly protects the disposable income of citizens and enhances transparency in the services sector.
Judicial Alignment: The Delhi High Court’s 2025 ruling has provided the necessary “legal teeth” for the CCPA to transition from issuing advisory guidelines to enforcing punitive actions.
Formalizing Industry Standards: The directive for restaurants to modify their billing software ensures that compliance is “built-in” to the business process, rather than being left to individual staff discretion.
Relevant Question for Policy Stakeholders: How will the CCPA coordinate with the GST Intelligence units to ensure that restaurants that have historically collected GST on illegal service charges are held accountable for tax misclassification and that these funds are recovered?
Follow the full news here: Consumer Rights Protection: CCPA Rules Against Mandatory Service Charges