Restaurants Can't Levy Service Charge Mandatorily With Food Bills: Delhi High Court

The Delhi High Court on Friday said that the payment of service charge by customers on food bills is voluntary and cannot be made mandatory by restaurants or hotels.

"Restaurants cannot levy service charge mandatorily with food bills as it is violation of Consumer Protection Act rules," the bench said, as per NDTV report.

The high court upheld the validity of Central Consumer Protection Authority or CCPA guideline asking restaurants not to impose service charge with the bill, it added.

In December 2024, the high court reserved its verdict on the petitions by restaurant bodies challenging the guidelines prohibiting hotels and restaurants from automatically levying service charge on food.

Federation of Hotels and Restaurant Associations of India or FHRAI and National Restaurant Association of India or NRAI moved court in 2022 by filing two separate petitions.

The guidelines, issued by CCPA on July 4, 2022, were stayed by the high court later that month.

The counsel for FHRAI, in his rejoinder submissions, asserted the CCPA had no power or jurisdiction to impose such a ban, without following the principles of natural justice.