Mandatory Service Charges Scrapped: Victory for Consumers

The Delhi High Court has ruled that service charges on food and beverage bills are voluntary, supporting the CCPA's guidelines against mandatory imposition by restaurants. This decision upholds consumer rights and marks a significant victory against deceptive practices in billing.

The Delhi High Court ruled in favor of consumers on Friday by declaring that service charges on food and beverage bills must be voluntary. This decision, applauded by Union Food and Consumer Affairs Minister Pralhad Joshi, supports the Central Consumer Protection Authority's (CCPA) guidelines.

Justice Prathiba M Singh dismissed petitions filed by the Federation of Hotels and Restaurant Associations of India and the National Restaurant Association of India. The court confirmed that mandatory service charges violate consumer rights and cannot be imposed on customers.

The judgment labeled mandatory service charges as misleading, likening them to service tax or GST, and categorized them as an unfair trade practice. Petitioners were ordered to pay a Rs 1 lakh penalty each to the CCPA for consumer welfare.

(With inputs from agencies.)