FOOD NEWS
Shangri-La’s Mister Chai Fined for Mandatory Service Charges
The Central Consumer Protection Authority has fined New Delhi’s Mister Chai Rs 1 lakh for automatically adding service charges to bills, highlighting consumer rights regarding voluntary tipping and transparent billing practices in India.
The Central Consumer Protection Authority (CCPA) has imposed a penalty of Rs 1 lakh on Mister Chai, a restaurant located within the
The investigation was prompted by consumer complaints alleging that the restaurant levied these charges without obtaining explicit consent from diners. Upon review, the CCPA determined that this practice violated the national guidelines issued on July 4, 2022, which strictly regulate how service charges are handled in the hospitality sector. In response to the ruling, Shangri-La Eros New Delhi stated that it had already discontinued the practice of automatic service charges across its dining outlets as of October 1, 2026, noting that current bills now reflect only the cost of items and government-mandated taxes.
Understanding Your Rights as a Diner
Under the 2022 CCPA guidelines, restaurants and hotels are prohibited from adding service charges to bills by default. The regulatory stance is clear: a charge cannot be considered voluntary if it is pre-applied to the invoice, regardless of whether the menu labels it as optional. The CCPA emphasized that forcing a customer to actively request the removal of a pre-added fee is inconsistent with fair trade practices. Furthermore, diners are protected from being denied service or facing discrimination should they choose to refuse such charges.Beyond the issue of consent, the ruling highlights critical aspects of billing transparency. Restaurants are not permitted to levy Goods and Services Tax (GST) on an automatically added service charge. If a customer identifies an unauthorized fee on their bill, they have the right to request its removal and demand a revised invoice. Should an establishment refuse to comply, consumers are encouraged to document the bill as evidence and escalate the matter through the National Consumer Helpline by calling 1915 or utilizing the official government portal. This recent enforcement action underscores the authority's commitment to ensuring that diners are not misled into paying fees they have not explicitly agreed to.
