Wed Dec 31 02:46:46 UTC 2025: News Article:

Mumbai Restaurant Chain Fined for Illegal Service Charge

Mumbai, India – The Central Consumer Protection Authority (CCPA) has slapped China Gate Restaurant Private Limited, operator of the Bora Bora restaurant chain in Mumbai, with a Rs 50,000 fine for illegally levying mandatory service charges on customers.

The CCPA order, dated December 29th, stated that the restaurant was adding a 10% service charge by default to bills and charging GST on top of that amount. This practice violates established guidelines stating that service charges are voluntary and cannot be automatically added to bills.

The action stemmed from a complaint filed through the National Consumer Helpline by a Mumbai resident, who alleged that Bora Bora refused to remove the service charge and staff even misbehaved when challenged.

The CCPA highlighted a Delhi High Court ruling (March 28, 2025, National Restaurant Association of India versus Union of India) which upheld the authority’s guidelines deeming mandatory service charges illegal. Despite this ruling, the restaurant continued the practice.

An investigation revealed service charges were automatically added to all bills between March 28 and April 30, 2025, clearly demonstrating the charge was not optional. The investigation also found the restaurant ignored consumer complaints, charged GST on the illegal service charge, and had a non-functional email for grievance redressal.

While the restaurant claimed the service charge was discretionary and that it had stopped the practice after becoming aware of the court ruling, the CCPA said that it failed to provide evidence that it complied with the laws during the relevant period.

The CCPA has ordered China Gate Restaurant Private Limited to modify its billing software to remove the default service charge, ensure consumer grievance channels are functional, and submit a compliance report within 15 days. Considering the chain operates multiple outlets, the CCPA noted this practice affects a large number of consumers.

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