The Central Consumer Protection Authority (CCPA) has fined China Gate Restaurant Private Limited, the operator of Mumbai’s Bora Bora restaurant chain, Rs 50,000 for unlawfully imposing mandatory service charges on customers. Despite guidelines stating that service charges must be voluntary, the restaurant was found adding a 10% service charge to bills by default, along with charging GST on that amount. This action came after a complaint was lodged by a consumer in Mumbai through the National Consumer Helpline.
The CCPA’s order, dated December 29, highlighted that the Bora Bora restaurant had been non-compliant with regulations by automatically including service charges in customers’ bills. The Delhi High Court had previously ruled that mandatory service charges were illegal, supporting the authority’s guidelines. An investigation revealed that the restaurant continued to levy service charges between March 28 and April 30, 2025, despite the court’s directive.
The CCPA’s investigation further disclosed that the restaurant had failed to address the consumer’s complaint despite repeated notices, violated guidelines by charging GST on service charges, and had an inactive email address hindering consumer grievance redressal. Although the restaurant claimed the service charge was optional and ceased the practice post the court ruling, it could not provide evidence of compliance during the relevant period. The authority emphasized the importance of consumer protection, especially considering the restaurant’s multiple outlets in Mumbai.
