New Delhi, Dec 30 (NationPress) The Central Consumer Protection Authority (CCPA) has levied a fine amounting to Rs 50,000 on China Gate Restaurant Private Limited, which manages the Bora Bora restaurant chain in Mumbai, for unlawfully imposing mandatory service charges on patrons.

In a directive dated December 29, the CCPA stated that the restaurant was automatically adding a 10 percent service charge to customers' bills while also applying GST on that service charge.

This practice occurred in direct defiance of explicit guidelines that mandate service charges be voluntary and not added without consent.

The enforcement action came after a complaint was lodged by a consumer in Mumbai through the National Consumer Helpline.

The complainant asserted that the Bora Bora restaurant not only refused to remove the service charge but also exhibited inappropriate behavior when the matter was highlighted.

The CCPA referred to a ruling by the Delhi High Court, issued on March 28, 2025, in the case of National Restaurant Association of India versus Union of India, which clearly reaffirmed the authority's guidelines and deemed mandatory service charges illegal.

In spite of this unequivocal ruling, the restaurant persisted in adding service charges by default in its billing system.

A comprehensive inquiry by the CCPA's director general (investigation) revealed that service charges were routinely added to all bills from March 28 to April 30, 2025.

This indicated that the charge was not optional but rather imposed on all customers. The investigation additionally found that the restaurant neglected to address the consumer's complaint even after receiving multiple notifications, improperly charged GST on the service charge contrary to guidelines, and maintained a non-functional email address, which hindered consumers from utilizing grievance redressal channels.

While the restaurant contended that the service charge was discretionary and claimed to have halted the practice upon learning of the court ruling, the CCPA stated that it did not provide any evidence of compliance during the relevant timeframe.

The authority also noted that the refund to the complainant was only processed following regulatory intervention.

Given that the restaurant has multiple locations in Mumbai, the CCPA highlighted that this practice could adversely impact a significant number of consumers.

It instructed the company to revise its billing software to eliminate the default service charge, ensure that consumer grievance channels are operational at all times, and present a compliance report within 15 days.