Like an unseen surcharge slipping into a dinner bill, a routine meal turned into a test of consumer rights.
CCPA Fines Bora Bora Operator for Illegal Mandatory Service Charges
The Central Consumer Protection Authority (CCPA) has fined China Gate Restaurant Private Limited, which operates the Bora Bora restaurant chain in Mumbai, Rs 50,000 for unlawfully imposing mandatory service charges on customers. The penalty follows findings that the restaurant violated established consumer protection guidelines by automatically adding service charges to bills.
In an order dated December 29, the CCPA stated that the restaurant was levying a 10 per cent service charge by default and was also charging GST on this amount. This practice directly contravenes existing rules, which make it clear that service charges are voluntary and cannot be added automatically to customer bills.
The action stemmed from a complaint lodged by a Mumbai consumer via the National Consumer Helpline. The complainant alleged that staff at the Bora Bora restaurant refused to remove the service charge when requested and behaved improperly when the issue was raised.
The CCPA referred to the Delhi High Court’s March 28, 2025 judgment in the case of National Restaurant Association of India versus Union of India, which upheld the authority’s guidelines and ruled that mandatory service charges are illegal. Despite this ruling, the restaurant continued to levy service charges by default through its billing software.
CCPA Investigation Finds Bora Bora Restaurant Defaulted Service Charges, Orders Compliance
A detailed probe conducted by the CCPA’s director general (investigation) found that service charges were automatically applied to all bills between March 28 and April 30, 2025, clearly establishing that the charge was not optional. The investigation also revealed that the restaurant failed to address the consumer’s complaint despite multiple notices, charged GST on the service charge in violation of guidelines, and maintained a non-functional email address, limiting access to grievance redressal.
Although the restaurant claimed the service charge was discretionary and said it discontinued the practice after learning of the court ruling, the CCPA noted that it failed to submit evidence proving compliance during the relevant period. The authority further observed that the refund to the complainant was processed only after regulatory intervention.
Given that the company operates several outlets across Mumbai, the CCPA said the practice had the potential to impact a large number of consumers. It directed the restaurant to modify its billing software, ensure grievance channels remain functional at all times, and submit a compliance report within 15 days.
In the quiet arithmetic of a restaurant bill, the regulator has reminded businesses that fairness, like good service, cannot be forced—it must be freely given.
Summary
The CCPA fined Bora Bora’s operator Rs 50,000 for illegally adding mandatory service charges and GST to customer bills, despite clear guidelines and a Delhi High Court ruling declaring the practice illegal. An investigation confirmed default charges, poor grievance handling and delayed refunds, prompting directions to fix billing systems and ensure consumer access to redressal mechanisms.
