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Delhi Hotel Restaurant Fined ₹1 Lakh for Service Charge Violation
Sentiment: NeutralHigh Priority
What Happened?
The Central Consumer Protection Authority has fined Mister Chai at Shangri-La Eros Hotel ₹1 lakh for adding a 10% service charge without customer consent. The restaurant must stop this practice and report compliance.
Key points
- The CCPA imposed a ₹1 lakh penalty on Mister Chai for automatically adding a service charge.
- The restaurant added a 10% service charge without customer consent, violating consumer protection guidelines.
- The CCPA received two complaints regarding the service charge from May and June 2025.
- The restaurant argued that the charge was discretionary and informed customers verbally.
- The CCPA rejected the restaurant's defense, stating customers should not have to opt-out of a charge.
- The restaurant has stopped collecting the service charge since October 1, 2026.
Key insights
- The ruling could lead to increased scrutiny of service charge practices in the hospitality industry.
- Consumers may feel more empowered to challenge unfair charges in restaurants.
- The decision may prompt other establishments to review their service charge policies.
Why it matters
This ruling reinforces consumer rights regarding service charges in restaurants.
Entities
Mister Chai· RestaurantShangri-La Eros Hotel· HotelCentral Consumer Protection Authority· OrganizationDelhi· City
Source
India Today
