Restaurant and hotel associations, including the National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India (FHRAI), have challenged the Delhi High Court's March 28, 2025 order that prohibits the mandatory imposition of service charges, typically ranging from 5% to 20%, on consumers’ pre-tax bills. The associations argue that service charges are a longstanding industry practice and an essential component of employee compensation, and have filed petitions seeking to overturn the court’s decision. The Delhi High Court’s single-judge ruling upheld guidelines issued by the Central Consumer Protection Authority (CCPA) in July 2022, which state that service charges must be voluntary and cannot be automatically added to food bills or collected under any other name. The court found that compulsory service charges violate consumer rights and directed that any such charges should be clearly presented as optional. Following the court’s March 28 order, the CCPA has taken suo motu action against five Delhi restaurants—Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation—for failing to refund mandatory service charges. Notices have been issued under the Consumer Protection Act, 2019, directing these establishments to refund the collected amounts. The CCPA’s action comes after complaints were received via the National Consumer Helpline. Industry representatives have indicated that restaurants may consider hiking menu prices by 5-8% to offset the potential impact on staff earnings if mandatory service charges are not permitted. The legal dispute is scheduled for a hearing before a division bench of the Delhi High Court on May 9.