India, March 28 -- The Delhi high court on Friday upheld the Central Consumer Protection Authority (CCPA)'s guidelines prohibiting hotels and restaurants from automatically levying service charges, saying its mandatory imposition violated consumer rights and amounted to unfair trade practices. The CCPA issued the guidelines in July 2022 to prevent unfair trade practices and violations of consumer rights.

Justice Prathibha M Singh said that service charges and tips are voluntary payments and restaurants or hotels cannot make them compulsory. "The imposition of a service charge in a mandatory manner is violative of consumer rights. The collection of service charges under various names amounts to unfair trade practice. The amount ought not ...