CCPA imposes ₹1 lakh penalty on Shangri-La Eros for levying service charge on restaurant bills

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Published 28 October 2026

Case: CCPA v. Shangri-La Eros
Statutes: Consumer Protection Act, 2019 — s.2(47)
Source: Bar & Bench

Bottom Line Up Front (BLUF)

The Central Consumer Protection Authority (CCPA) imposed a ₹1 lakh penalty on Shangri-La Eros for levying a service charge on restaurant bills, holding it an unfair trade practice and violation of consumer rights. The CCPA cited Section 2(47) of the Consumer Protection Act, 2019.

Ratio Decidendi · Legal Principle Established

Levying a service charge on restaurant bills without the express consent of the consumer constitutes an unfair trade practice and a violation of consumer rights under the Consumer Protection Act, 2019.

Practice & Procedural Impact for Advocates

Advocates should advise clients in the hospitality sector to cease automatic service charge imposition. Litigants can file complaints with the CCPA or consumer commissions for recovery of illegally levied service charges and penalties. Consumers are not obligated to pay service charges unless explicitly agreed upon.

Key Legal Takeaways

1Service charges cannot be automatically levied on restaurant bills.
2Consumers have the right to refuse payment of service charges.
3Levying service charges without consent is an unfair trade practice under the Consumer Protection Act, 2019.

The Legal Issue The Central Consumer Protection Authority (CCPA) addressed the practice of hotels and restaurants automatically levying a service charge on food bills. The issue centered on whether such a practice constitutes an unfair trade practice and a violation of consumer rights under the Consumer Protection Act, 2019.

Court's Reasoning The CCPA found that Shangri-La Eros had engaged in an unfair trade practice by levying a service charge on restaurant bills without the express consent of the consumers. The Authority referred to Section 2(47) of the Consumer Protection Act, 2019, which defines 'unfair trade practice'. The CCPA reiterated that service charge is not a government levy and is voluntary, and therefore, cannot be imposed automatically. The hotel's practice was deemed to be in contravention of the guidelines issued by the CCPA regarding the levy of service charges.

What Follows The CCPA imposed a penalty of ₹1 lakh on Shangri-La Eros for the violation. The hotel was directed to immediately cease the practice of levying service charges on restaurant bills. This decision reinforces the CCPA's stance against mandatory service charges and provides a precedent for similar cases of consumer rights violations in the hospitality sector.