The Central Consumer Protection Authority (CCPA) has imposed a penalty of ₹50,000 on China Gate Restaurant Private Limited, the operator of Mumbai’s Bora Bora restaurant chain, for unlawfully adding service charges to customer bills by default. The action was taken after the authority found that the restaurant’s billing software was designed to automatically include the service charge without obtaining explicit consent from customers, a practice that violates consumer protection norms. The order, dated December 29, was first reported by Bar and Bench.
In its findings, the CCPA concluded that the automatic inclusion of service charges amounted to an unfair trade practice under the Consumer Protection Act, 2019. The authority observed that such practices undermine consumer choice and transparency, particularly when customers are not clearly informed or given the option to decline the charge. As part of its directive, the CCPA instructed the restaurant to immediately modify its billing software to ensure that service charges are not added by default.
The action follows a March 2025 ruling by the Delhi High Court, which upheld the CCPA’s 2022 guidelines prohibiting restaurants and hotels from automatically levying service charges. Despite this judicial clarity, the inquiry revealed that Bora Bora continued to include the charge as a default component of its billing process, affecting customers at large. The investigation was initiated after a complaint was filed with the National Consumer Helpline, prompting the CCPA to take suo motu cognisance of the matter.
During the inquiry, Bora Bora’s management claimed that the 10 per cent service charge was discretionary and applied only with customer consent. The restaurant also stated that a distinction was maintained between food and alcohol charges and that a refund of ₹624 had been offered to the complainant as a goodwill gesture. However, the CCPA found these explanations unsatisfactory and ordered a deeper investigation into the practice.
The Director General (Investigation) identified multiple violations, including the continued levy of service charges even after the High Court’s ruling, the imposition of GST on the service charge amount, and the restaurant’s failure to respond adequately to the consumer complaint. The investigation also revealed that the restaurant’s official email address was non-functional and that the management showed poor cooperation during the inquiry, which the authority described as a disregard for consumer rights and accountability.
During hearings held in December 2025, Bora Bora informed the authority that it had stopped adding service charges after April 30, 2025, and had updated its menu cards to clearly state that no service charge would be levied. The restaurant also submitted evidence of refunding the complainant and displaying revised policies at its outlets. Despite this, the CCPA rejected the claim that the charges were ever truly voluntary.
In its final order, the authority emphasised that the root of the issue lay in the billing software itself, which was programmed to automatically add the service charge to every bill. This, the CCPA stated, made it incorrect to treat the charge as optional or consent-based. The authority concluded that such a system inherently violates consumer rights.
As part of the penalty, the CCPA has directed Bora Bora to modify its billing software, ensure a functional consumer grievance redressal mechanism, pay the imposed fine, and submit a compliance report within 15 days. The order reinforces the government’s stance that service charges cannot be imposed without explicit customer consent and that businesses must adhere strictly to consumer protection regulations.
