What happened
The Central Consumer Protection Authority (CCPA) has begun suo motu action against 41 restaurants across India for adding service charge by default on consumer bills. The complaint pattern came through the National Consumer Helpline (NCH), and supporting invoices showed that the charge was being added automatically without the consumer’s explicit consent.
The enforcement action is relevant for UPSC because it sits at the intersection of consumer rights, administrative enforcement, and unfair trade practice regulation. The issue is not merely about pricing; it is about whether a restaurant can treat a discretionary charge as compulsory.
Background and earlier position
The CCPA’s Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants were issued on 4 July 2022. Those guidelines state that service charge cannot be added automatically, cannot be collected under another name, and cannot be imposed by restricting entry or service.
The guidelines also say that service charge is voluntary and entirely at the consumer’s discretion. The service charge amount is not to be added to the food bill for the purpose of Goods and Services Tax calculation.
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