NEW DELHI, February 16, 2026 — In a landmark reinforcement of consumer rights, the Central Consumer Protection Authority (CCPA) has intensified its crackdown on the hospitality sector, effectively ending the era of “forced tipping” in India. Following a decisive Delhi High Court ruling in March 2025 that upheld the government’s 2022 guidelines, the CCPA has moved from advisories to aggressive enforcement, declaring mandatory service charges an “unfair trade practice.”
This shift marks a final victory for diners who have long complained about being embarrassed or forced into paying extra fees ranging from 5% to 10% on top of their food bills.
The “No-Default” Rule
The new legal landscape is clear: Service charges cannot be added to a bill by default. The Ministry of Consumer Affairs has reiterated that while a consumer can choose to tip for exceptional service, a restaurant cannot decide that amount for them.
Key pillars of the current guidelines include:
- No Default Entry: Restaurants are strictly prohibited from adding a service charge automatically to the invoice.
- No Substitute Names: Establishments cannot bypass the rule by renaming the fee as “Staff Welfare Fund,” “Convenience Fee,” or “Service Contribution.”
- GST Prohibition: Since a service charge is not a government tax, restaurants are barred from calculating GST on it.
- Right of Entry: A restaurant cannot deny entry or refuse service to a customer who explicitly refuses to pay a service charge.
The ₹50,000 Penalty: Enforcement in Action
The CCPA is no longer just issuing warnings. In a series of suo motu actions throughout late 2025 and early 2026, the regulator has penalized 27 major restaurant chains across India.
- Heavy Fines: High-profile establishments in Mumbai and Bengaluru, including the China Gate and Bora Bora chains, were slapped with fines of ₹50,000 for failing to modify their billing software to remove the default 10% charge.
- Mandatory Refunds: In several cases, such as a high-profile complaint against Barbeque Nation, the CCPA forced the restaurant to issue full refunds of the service charge amount to the aggrieved diners.
How to Handle a Violation
If you find a service charge on your bill today, you are legally empowered to take the following steps:
- Request Removal: Politely ask the staff to remove the charge. Under current laws, they must comply without resistance.
- Call 1915: If the management refuses, you can call the National Consumer Helpline (NCH) at 1915 or use the NCH app to lodge an immediate complaint.
- E-Daakhil: For persistent issues, consumers can file a formal complaint electronically via the e-daakhil portal for a speedy resolution by the Consumer Commission.
The Industry Response
While restaurant associations like the NRAI argue that these charges are vital for the welfare of “back-of-house” staff (like dishwashers and cooks) who don’t receive direct tips, the government maintains that staff salaries should be built into the menu pricing rather than hidden in a separate, mandatory levy.
As of February 2026, many restaurants have shifted to a “Voluntary Tip” box on the bill, where the space is left blank for the customer to fill in—or ignore—at their total discretion.
