The Delhi High Court has scheduled a hearing on May 9 to address the appeals filed by the National Restaurants Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India. These appeals challenge a previous court ruling that supported an order against the mandatory imposition of service charges on food bills.
The controversy began when the Central Consumer Protection Authority (CCPA) issued guidelines on July 4, 2022, prohibiting hotels and restaurants from automatically including a service charge in food bills. A single judge upheld these guidelines on March 28, asserting that such mandatory charges were contrary to public interest and affected the economic and social interests of consumers.
Moreover, the judge noted that the compulsory service charge, combined with the Goods and Services Tax (GST) already applied to bills, placed an undue financial burden on consumers, referring to it as a “double whammy.”
During the upcoming hearing, a bench consisting of Chief Justice D.K. Upadhyaya and Justice Tushar Rao Gedela will review the legal arguments presented by the NRAI and the Federation. Advocate Lalit Bhasin, representing NRAI, argues that specifying the service charge on the menu and within the establishment should not be considered an unfair trade practice under the Consumer Protection Act, 2019. The appeal also questions whether the CCPA’s guidelines exceed its jurisdiction.
