The Central Consumer Protection Authority (CCPA) has fined China Gate Restaurant Private Limited ₹50,000 for charging customers a mandatory service charge at its Bora Bora restaurants in Mumbai. According to the authority, the restaurant was adding a 10 per cent service charge directly to customers’ bills without asking for their consent. On top of this, the restaurant was also charging GST on the service charge amount, which is not allowed under existing rules.

The CCPA passed this order on December 29 after receiving a complaint from a customer in Mumbai. The complaint was filed through the National Consumer Helpline. The customer said that the Bora Bora restaurant refused to remove the service charge from the bill even after being asked. The complainant also alleged that the restaurant staff misbehaved when the issue was raised.

The authority pointed out that government guidelines clearly state that service charges are optional. Restaurants cannot add them automatically to the bill. Customers have the right to decide whether they want to pay a service charge or not.

The CCPA also referred to a March 28, 2025 ruling by the Delhi High Court in the case of the National Restaurant Association of India versus the Union of India. In this judgment, the court clearly upheld the government’s guidelines and ruled that mandatory service charges are illegal. Despite this clear court order, Bora Bora restaurants continued to add service charges by default through their billing system.

A detailed investigation by the CCPA’s Director General (Investigation) found that the service charge was automatically added to every bill between March 28 and April 30, 2025. This showed that the charge was not voluntary but forced on all customers. The investigation also found several other violations. The restaurant failed to properly respond to the consumer’s complaint despite receiving multiple notices. It also charged GST on the service charge, which goes against the rules. In addition, the restaurant had a non-working email address, making it difficult for customers to file complaints.

Although the restaurant claimed that the service charge was optional and said it had stopped the practice after learning about the court ruling, it failed to provide any proof to support this claim. The CCPA also noted that the refund to the complainant was given only after regulatory action was taken.

Since the company operates multiple outlets in Mumbai, the CCPA said many consumers could have been affected. The authority has now directed the restaurant to remove the default service charge from its billing system, keep consumer complaint channels functional at all times, and submit a compliance report within 15 days.