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Pictures of the aesthetically arranged food on the plates: posted on social media, tummies and hearts filled after eating out at your favourite restaurant, but then comes the bill. More often than not, the final amount is a little higher than what you might’ve calculated from adding up the figures on the right side of the menu. And the hidden culprit often remains the service charge.
While some diners pay the full amount without thinking twice, others sit confused about whether it’s mandatory to pay about 5-10% of the food bill. To end the queries, legal experts explain the recent CCPA mandate in this Slurrp exclusive.
Team Slurrp interviewed Shreya Sharma, the Founder & CEO of Rest The Case, one of India’s largest lawyer search and business compliance platforms and Dinesh Jotwani, a distinguished legal practitioner with nearly three decades of experience at the Indian Bar. Why don’t you read on and know your rights as a consumer, as the lawyers break down the recent change of rules in service charges?
Slurrp: What exactly has been declared illegal regarding service charges?
Image Credit: Adobe Stock
Dinesh Jotwani: Under Indian law, the position regarding service charges in restaurants and hotels is unequivocal. Pursuant to the guidelines issued by the Central Consumer Protection Authority (CCPA) under the Consumer Protection Act, 2019, establishments are prohibited from compelling consumers to pay any service charge. The judiciary has upheld this legal position; challenges before the Delhi High Court have not resulted in any deviation from this principle. In essence, the decision to pay a service charge rests solely with the consumer and not with the establishment.
For example, assume that your bill amount is ₹100, GST is ₹18, and a service charge of ₹10 is added. Legally, the consumer is obligated to pay only ₹118, which includes GST, a non-negotiable statutory levy. The service charge of ₹10, however, is optional. If you don’t wish to pay the service charge, you can ask for the removal and the restaurant is legally bound to adhere to your request.
Slurrp: What is the difference between “service charge” and “service tax” or “GST”?
Shreya Sharma: GST (Goods & Services Tax) is a mandatory government tax (usually 5% in most restaurants). You are required to pay this. On the other hand, a service charge is a voluntary tip or gratuity given to the staff. It is not a tax, and you can choose whether to pay it. Note that the Restaurants are strictly prohibited from calculating GST on the service charge amount. GST can only be applied to the total value of food and beverages.
Image Credit: Adobe Stock
Slurrp: Can restaurants still levy a service charge if they clearly inform customers beforehand?
Dinesh Jotwani: The mere mention of a service charge on the menu or through a notice at the entrance does not render it obligatory. Explicit consumer consent is a prerequisite for imposing such a charge. Should a consumer decline to pay, the restaurant cannot enforce payment or impose any form of penalty. Ultimately, the decision to pay a service charge is always in the consumer's hands.
Slurrp: Can a customer ask for it to be removed after the meal is finished?
Shreya Sharma: Absolutely, you have the legal right to ask for its removal even if you saw a notice at the entrance. Because the charge must be "voluntary and optional," a customer can decide at the very end, based on their satisfaction, whether to pay it.
Slurrp: Can a restaurant deny entry if a customer refuses to pay the service charges?
Dinesh Jotwani: A restaurant cannot lawfully deny you entry or refuse service solely because you express your intention not to pay a voluntary service charge. Making the payment of such a charge a precondition for service is unfair and may amount to discriminatory practice.
Image Credit: Adobe Stock
Slurrp: What immediate steps should a consumer take if a restaurant refuses?
Shreya Sharma: If the manager refuses to remove the charge:
- Request a Revised Bill: Politely cite the March 2025 Delhi High Court judgment and CCPA guidelines.
- Document the Refusal: If they insist, pay the bill to avoid a scene, but ensure the service charge is clearly listed. Take a photo of the bill.
- National Consumer Helpline (NCH): Call 1915 or WhatsApp 8800001915 while still at the restaurant.
- Electronic Evidence: Keep the invoice; this is the primary evidence for a formal complaint.
Slurrp: How to file a formal case online without an expensive lawyer?
Shreya Sharma: India has made it simple to file a complaint through the e-Daakhil portal, the official online platform for filing cases under the Consumer Protection Act, 2019. If a restaurant violates the CCPA's rules, penalties may be imposed.
Step 1: Visit edaakhil.nic.in.
Step 2: Register using your Aadhaar card or your mobile number.
Step 3: Enter the restaurant’s details and upload your bill as evidence.
Step 4: Submit the complaint. You can represent yourself; no lawyer is required.
Slurrp: What advice would you give diners who want to avoid confrontation?
Dinesh Jotwani: It is advisable to remain composed and courteous while asserting your rights. Clearly communicate your request to remove the service charge from the bill, pay only for the food and GST, and retain all receipts. Avoid escalating the matter within the premises. Should the restaurant refuse your request, you may pursue legal remedies subsequently. Exercising your entitlements with restraint and civility is generally the most effective course of action.
