In a significant move for Indian diners, the Central Consumer Protection Authority (CCPA) officially directed Barbeque Nation Hospitality Ltd. on February 9, 2026, to immediately stop levying mandatory service charges across its restaurant chain.
This order reinforces the government’s stance that service charges or “tips” are strictly voluntary and cannot be added to a bill by default.
Key Details of the CCPA Order
The action originated from a consumer complaint filed on the National Consumer Helpline (NCH) involving a bill from January 2025.
- The Complaint: A diner was charged a ₹335 service fee on top of their food bill and GST.
- The Resolution: After escalation, Barbeque Nation issued a full refund to the consumer in April 2025.
- The Ruling: Although the specific complaint was settled, the CCPA issued a suo motu (on its own motion) order to create a clear enforcement benchmark, directing the chain to discontinue the practice of automatic service charge collection across all outlets.
Is Service Charge Illegal in India?
Under the Consumer Protection Act, 2019, and a final Delhi High Court ruling from March 2025, the legal status of service charges is clear:
- Voluntary, Not Mandatory: A service charge is a tip. It is at the consumer’s discretion and cannot be imposed as a condition for entry or service.
- No Automatic Billing: Restaurants are prohibited from adding it to the bill by default.
- No “Tax on Tip”: Restaurants cannot add a service charge and then calculate GST on the combined total.
- Clear Disclosure: Restaurants must explicitly inform customers that the charge is optional.
Wider Crackdown on the Industry
Barbeque Nation is not the only chain under the scanner. In January and February 2026, the CCPA took action against 27 major restaurant groups nationwide.
- China Gate (Bora Bora): Fined ₹50,000 for mandatory service charges and ordered to modify its billing software.
- Café Blue Bottle (Patna): Fined ₹30,000 and ordered to refund customers.
- Other Entities: Notices were also issued to brands like Chaayos and Castle Barbeque for similar billing irregularities.
What Should You Do as a Consumer?
If you see a “Service Charge” on your bill at any restaurant in India:
- Ask to Remove It: You have the legal right to ask the restaurant to remove the charge if you are unsatisfied with the service or simply choose not to tip.
- Check the GST: Ensure GST is only calculated on the food and beverage amount, not the service charge.
- Report Violations: If a restaurant refuses to remove a mandatory charge, you can register a grievance by calling 1915 (National Consumer Helpline) or using the NCH App.
