Consumer Authority Orders Barbeque Nation to Cease Service Charge
The Central Consumer Protection Authority (CCPA) has mandated Barbeque Nation Hospitality Ltd to stop charging a service fee at its restaurants. This decision follows a consumer complaint regarding unfair billing practices, and pertains to an incident where a ₹335 service charge was added to the bill.
Officials from the CCPA revealed that the complaint was filed in March 2025 alongside the establishment’s initial refusal to issue a direct refund. Following further escalation, full reimbursement was issued by April 2025, confirming consumer advocacy efforts.
Background of Consumer Complaint
The complaint originated from the National Consumer Helpline (NCH), where the consumer expressed dissatisfaction over the restaurant’s practice of including a service charge in addition to Goods and Services Tax (GST) on the total bill. This prompted the CCPA to act in accordance with consumer protection guidelines established in the Consumer Protection Act, 2019.
Barbeque Nation, known for its casual dining experience, has been operating since 2006 and boasts approximately 200 outlets across India, as well as six located in the UAE, Malaysia, and Oman. For the fiscal year 2025, the company recorded consolidated revenues of ₹1,233 crore but also reported a net loss of ₹27.79 crore.
Implications of the CCPA Order
The CCPA’s recent order reinforces a tightening regulatory landscape regarding service charges levied by restaurants. According to the authority, automatic or mandatory service charges violate consumer rights and constitute an unfair trade practice. The order aligns with a previous ruling from the Delhi High Court, which stated that tips or service charges should be voluntarily given and cannot be automatically added.
Ashim Sanyal, CEO of Consumer Voice, emphasized the significance of the CCPA’s action, stating, “When service charges are not permitted, the CCPA’s action against a large food chain sets a clear precedent for others.” He noted that mandatory service charges are illegal and stated that compliance with the law is essential for restaurants.
Recent Enforcement Actions
The CCPA’s decisive action against Barbeque Nation is part of a broader initiative aimed at regulating charging practices in the restaurant industry. In a related incident, the CCPA imposed a penalty of ₹50,000 on China Gate Restaurant Private Limited for similar violations, demonstrating a commitment to protecting consumer rights.
Legal experts have praised the CCPA’s proactive stance, highlighting its importance even in the absence of ongoing violations. Manish K. Shubhay, a partner at The Precept-Law Offices, remarked, “A reasoned order was necessary even in the absence of a continuing violation. The directive reinforces the Delhi High Court’s ruling and establishes a benchmark for future enforcement of restaurant billing practices.”
Consumer Advocacy and Refunds
The NCH plays a crucial role in addressing consumer grievances, having resolved over 67,000 complaints and facilitated refunds totaling approximately ₹45 crore between April and December 2025. This reflects the increasing use of consumer complaint channels and the effectiveness of government bodies in mediating disputes.
The CCPA’s order against Barbeque Nation is seen as a reinforcing mechanism for existing consumer protection guidelines. Although the restaurant has ceased imposing service charges, the regulatory authority took this action to ensure compliance and deter future violations within the industry.
Conclusion and Future Directions
The CCPA has underscored its commitment to consumer rights through various enforcement actions. By creating a clear regulatory framework, the authority lays the groundwork for stricter monitoring of compliant practices in the hospitality sector.
As the situation evolves, consumer advocacy groups remain vigilant and motivated to continue pushing for fair and transparent billing practices across all sectors. The CCPA’s directive not only impacts Barbeque Nation but serves as a cautionary tale for other establishments still engaging in similar practices.