The Central Consumer Protection Authority (CCPA) has imposed a penalty of INR 1 lakh on Mister Chai, the restaurant at Shangri-La Eros New Delhi, for automatically levying a 10% service charge without customers’ explicit consent.
In an order dated October 22, the regulator held that the practice violated consumer rights and constituted an unfair trade practice under the Consumer Protection Act, 2019.
The CCPA took action following complaints filed in May and June 2025. In one instance, the restaurant charged INR 435 as service charge on a bill subtotal of INR 4,350, with the total bill reaching INR 5,646 after taxes. In another case, it levied INR 125 on a subtotal of INR 1,250.
The hotel told the regulator that the charge was discretionary and could be waived on request. It also said it had renamed the charge “Charges for voluntary staff contribution (optional)”. However, the CCPA observed that automatically adding the amount and requiring customers to seek its removal effectively made the charge an opt-out mechanism rather than a voluntary payment.
The authority cited the Delhi High Court’s March 28, 2025, judgment upholding the CCPA’s service charge guidelines, which prohibit hotels and restaurants from imposing such charges by default.
The hotel has been directed to pay the penalty and submit a compliance report to the CCPA within 15 days of receiving the order.
