Restaurant bill › Service charge rules

Service charge on restaurant bills

Many restaurants used to add 5 to 10% service charge to every bill. That is no longer allowed by default.

What the rules say

The Central Consumer Protection Authority (CCPA) issued guidelines on 4 July 2022. In short:

• A hotel or restaurant may not add a service charge automatically or by default to the bill.
• It may not collect it under another name.
• It may not force a guest to pay it, or refuse entry or service for not paying it.
• It must tell guests clearly that paying a service charge is voluntary and at their choice.
• Service charge may not be added to the bill and then GST charged on the total without the guest’s choice.

On 28 March 2025 the Delhi High Court upheld these guidelines and held that service charge and tips are voluntary payments that cannot be made compulsory on food bills.

How the maker handles it

Service charge is off by default. Tick "Add service charge" only when the guest has agreed, and type the percentage. It is worked out on the food value after discount. When GST applies, GST is charged on the service charge too, because it becomes part of the value of your service.

Tips

A tip the guest leaves in cash for the staff is not part of your bill. If you add a tip line to the bill, treat it like a service charge: only with the guest’s consent.

Good practice

• Show prices on the menu including all compulsory charges.
• If you want to suggest a tip, say so on the menu or a table card as voluntary.
• Train staff to remove a service charge at once if a guest asks.