As of today, April 29, 2025, two appeals have been filed in the Delhi High Court challenging a single judge’s order that prohibits restaurants from mandatorily levying service charges on food bills. The National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India (FHRAI) have contested the ruling, arguing that displaying a service charge on menus and bills does not constitute an unfair trade practice under the Consumer Protection Act. They assert that such charges are vital for the welfare of restaurant staff and are a longstanding industry practice.

The Delhi High Court has scheduled the hearing of these appeals for today, with Chief Justice D.K. Upadhyay and Justice Tushar Rao Gedela presiding over the case.

In March 2025, Justice Prathiba M. Singh upheld the Central Consumer Protection Authority’s (CCPA) guidelines, ruling that service charges must be voluntary and cannot be automatically included in bills. The court emphasized that such mandatory charges impose an unfair financial burden on consumers and violate their rights under the Consumer Protection Act. It also noted that the term “service charge” could mislead consumers into thinking it is a government-imposed fee.

The outcome of today’s hearing could have significant implications for the hospitality industry, potentially altering how service charges are implemented in restaurants across Delhi.

Sources