NEW DELHI: The Central Consumer Protection Authority (CCPA) - the country's apex consumer protection authority - has initiated suo motu action against 27 restaurants for mandatory levy of 'service charge' despite guidelines issued by it against the same, which have been upheld by Delhi high court. Besides directing these restaurants to immediately refund consumers, CCPA is investigating complaints for penal action against the food outlets. The authority expects that such action will deter other restaurants from levying service charge mandatorily. In at least two cases, the restaurants violating the guidelines have been fined up to Rs 50,000. The CCPA has also directed these restaurants to modify their billing system, as mandatory levy of service charge has been declared an unfair trade practice.

Investigations carried out by CCPA revealed that the restaurants, including Cafe Blue Bottle, Patna, and China Gate Restaurant Pvt Ltd (Bora Bora), Mumbai, were levying a 10% service charge by default.

In these cases, penalties have been imposed. The CCPA said it is "closely monitoring complaints received on the National Consumer Helpline regarding levy of service charge and will continue to take strict action against non-compliant restaurants to safeguard consumer rights and prevent unfair trade practices".