CCPA directs Barbeque Nation to stop levying service charge

The Central Consumer Protection Authority (CCPA) recently directed Barbeque Nation Hospitality Limited to discontinue the practice of levying service charge at its restaurants.

The order was passed after the CCPA took suo motu cognisance of a consumer complaint registered on the National Consumer Helpline (NCH) alleging that Barbeque Nation had levied a service charge in addition to CGST and SGST on a food bill in January 2025.

The consumer had sought a refund of ₹335 collected as service charge. While the restaurant initially offered to adjust the amount against a future visit, a direct refund was later issued on April 16, 2025 through the NCH mechanism. The grievance was subsequently closed on April 22, 2025.

The CCPA noted that the levy of service charge on January 18, 2025 was covered by an interim order of the Delhi High Court. However, following the High Court’s final judgment dated March 28, 2025 in National Restaurant Association of India v. Union of India, the restaurant chain had completely stopped charging service fees and had undertaken to refund any earlier service charge amounts upon request by customers.

In that judgment, the High Court upheld the CCPA’s guidelines and held that service charge or tip is a voluntary payment and cannot be imposed mandatorily or added by default to a bill.

After considering the investigation report, the CCPA recorded that:

• the service charge amount had been fully refunded to the consumer;

• the levy at the relevant time was not illegal as it was protected by an interim judicial order; and

• the restaurant had shown compliance with the post-judgment directions by discontinuing the practice.

The Authority further held that the conduct of the restaurant did not amount to an unfair trade practice under the Consumer Protection Act, 2019

The CCPA accordingly directed discontinuation of the practice of levying service charge, if any, at Barbeque Nation outlets and closed the proceedings under Sections 20 and 21 of the Consumer Protection Act, 2019.

Barbeque Nation Hospitality Limited was represented by its Legal Head Rashmi Ranjan Sahoo.

[Read Order]