Delhi hotel fined for automatically adding 10% service charge to meals

The Central Consumer Protection Authority fined Shangri-La Eros hotel Rs 1 lakh for automatically tacking on a 10% service charge at its Mister Chai restaurant. The regulator also instructed the outlet to stop collecting any such charge by default. Evidence from a consumer showed the surcharge was added to bills of Rs 4,350 and Rs 1,250, with GST then applied to the higher amounts.

Although the hotel claimed the fee was voluntary and could be declined, CCPA said the automatic inclusion violated its guidelines and amounted to an unfair trade practice. The authority highlighted that the onus should not be on customers to opt out. In response, the hotel said it had refunded the complainant and would remove the automatic charge from its billing system starting October.