Mumbai Restaurant Fined ₹50,000 for Illegally Charging Service Fees

New Delhi: Diners, take note—restaurants cannot forcefully levy service charges on customers. The Central Consumer Protection Authority (CCPA) has imposed a ₹50,000 fine on Bora Bora Restaurant in Mumbai for adding service charges to bills without customer consent. The restaurant is operated by China Gate Restaurant Private Limited.

Reason for the Fine
The CCPA issued the order on 29 December 2025 after it was found that the restaurant was automatically adding a 10% service charge to customer bills, including GST, which is strictly against the rules. By law, service charges are optional, and restaurants cannot include them in bills without explicit consent.

Customer Complaint Triggered Action
The investigation followed a complaint from a Mumbai customer via the National Consumer Helpline. The customer claimed that Bora Bora Restaurant refused to remove the service charge from their bill and that staff were rude when the issue was raised.

Court Backing
CCPA noted that the Delhi High Court, in a 28 March 2025 ruling in National Restaurant Association of India vs Union of India, had clearly stated that forcing customers to pay service charges is illegal. Despite this, the restaurant continued to add service charges to all bills between 28 March and 30 April 2025, irrespective of customer consent. GST on these charges also violated regulations.

Inspection Findings
The investigation revealed that the restaurant had:

• Ignored customer complaints
• Failed to act even after receiving multiple notices
• Operated with a non-functional email for complaints, making it difficult for customers to report issues

Restaurant’s Response
The restaurant claimed that service charges were optional and that they stopped the practice after the court ruling. However, CCPA found no evidence that the rules were followed at the time. Customers were reimbursed only after CCPA intervention.

CCPA’s Orders
Given that Bora Bora operates at multiple locations in Mumbai, CCPA warned that many customers could be affected by such practices. The authority has instructed the restaurant to:

• Update their billing software to prevent automatic service charges
• Keep all channels open for customer complaints
• Submit compliance reports within 15 days

This case highlights the importance of protecting consumer rights and the consequences of non-compliance by businesses.