CCPA Fines China Gate ₹50,000 For Service Charge Automatically Levied At Bora Bora Mumbai

The Central Consumer Protection Authority (CCPA) has recently levied a penalty of Rs 50,000 on China Gate Restaurant Private Limited for automatically adding a service charge to restaurant bills and charging GST on it, calling the practice unfair to consumers.

The order relates to the company's “Bora Bora” outlet in Mumbai.

The order was passed by a coram comprising Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra. The Authority said the service charge was not optional in practice and was added by default through billing software.

“The genesis of the service charge in the bill is the command embedded in the billing software, leading to default addition of service charge to every bill. Therefore it shali be erroneous to presume that the service charge was voluntary. This effectively negates the restaurants contention before CCPA that the service charge was voluntary. The facts and evidences in this case clearly established that the service charge was mandatorily levied on all consumers, in contravention of the CCPA guidelines and the judgement of Hon'ble High Court of Delhi.”, the authority said.

The case traces back to a consumer complaint lodged through the National Consumer Helpline by a Mumbai resident who visited the Bora Bora outlet on 19 April 2025.

The consumer said a 10 percent service charge was added to his bill, along with GST. He claimed the staff did not remove the charge despite his request, and he eventually paid the amount. The bill was attached to the complaint.

In its response to a show cause notice, the restaurant claimed the service charge was discretionary, taken only with customer consent, and used for staff welfare. It also said the charge was split between food and alcohol only for tax clarity and offered to refund the amount as a goodwill gesture.

The Authority was not convinced. Its investigation found that the service charge was automatically added through the billing system and that GST was levied on it. This was in breach of the 2022 CCPA guidelines.

The restaurant was also faulted for its failure to respond to the consumer's complaint in time and for not cooperating with the investigation.

The CCPA also relied on the Delhi High Court's ruling in National Restaurant Association of India v. Union of India, which upheld the service charge guidelines and made it clear that mandatory service charges are contrary to law.

Quoting the judgment, the authority noted that while customers are free to leave a voluntary tip, “the amount, however, ought not to be added by default in the bill/invoice and should be left to the customer's discretion.”

Holding that the default addition of a service charge misleads consumers about the real price of food and services, the CCPA said the practice violates basic consumer rights and amounts to an unfair trade practice.

Apart from the penalty, the restaurant has been directed to immediately change its billing software to remove automatic service charge additions. It is also ordered to ensure its grievance redressal systems are fully functional and file a compliance report within 15 days.

The authority also pointed out that given the company's large presence and multiple outlets, such practices could impact a wide number of consumers if left unchecked.

Case Title: China Gate Restaurant Private Limited (Bora Bora)

Case Number: CCPA- 2/26/2025-CCPA

Order Date: 29.12.2025

Click Here To Read/Download Order