is this illegal and unfair??

There was an NCDRC decision that they should not charge for a plastic bag..  If you don't want to pay it is better to take your own bag or insist for home delivery.  For small things, unless you are rich, you can not afford litigation which is waste of time and energy.  However, issue a notice to the management about the unhealthy practice.

The Supermarkets are under the instructions of the Government to charge for the carry bags. Government has to resort to such a step due to the irresponsibility of the general population in misusing the carry bags and throwing them helter-skelter which are blocking the drains and sometimes causing floods also and these plastic carry bags are a threat to the environment.