New Delhi, Dec 30 (IANS) The Central Consumer Protection Authority (CCPA) has imposed a fine of Rs 50,000 on China Gate Restaurant Private Limited, which operates the Bora Bora restaurant chain in Mumbai, for illegally levying mandatory service charges on customers.

In an order dated December 29, the Central Consumer Protection Authority said the restaurant was adding a 10 per cent service charge by default to customers’ bills and was also charging GST on that amount.

This was done despite clear guidelines stating that service charges are voluntary and cannot be added automatically.

The action followed a complaint filed by a Mumbai consumer through the National Consumer Helpline.

The complainant alleged that the Bora Bora restaurant refused to remove the service charge from the bill and even misbehaved when the issue was raised.

The CCPA noted that the Delhi High Court, in its March 28, 2025 ruling in the case of National Restaurant Association of India versus Union of India, had clearly upheld the authority’s guidelines and ruled that mandatory service charges are illegal.

Despite this clear direction, the restaurant continued to levy service charges by default through its billing system.

A detailed investigation by the CCPA’s director general (investigation) found that service charges were automatically added to all bills between March 28 and April 30, 2025.

This showed that the charge was not optional but imposed on all customers. The investigation also found that the restaurant failed to resolve the consumer’s complaint despite receiving multiple notices, charged GST on the service charge in violation of the guidelines, and had a non-functional email address, which restricted consumers from accessing grievance redressal mechanisms.

While the restaurant claimed that the service charge was discretionary and said it had stopped the practice after becoming aware of the court ruling, the CCPA said it failed to provide any proof showing compliance during the relevant period.

The authority also observed that the refund to the complainant was processed only after regulatory intervention.

Considering that the restaurant operates multiple outlets in Mumbai, the CCPA said the practice had the potential to affect a large number of consumers.

It directed the company to modify its billing software to remove the default service charge, ensure that consumer grievance channels remain functional at all times, and submit a compliance report within 15 days.

–IANS

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