Hotels can charge you more than MRP for bottled water: What you should know

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Can a hotel or a restaurant charge for a bottle of drinking water more than the maximum retail price marked on the container? The answer is yes. In a major blow to consumers, the Supreme Court on Tuesday held that hotels and restaurants are not bound by the maximum retail price (MRP) when they sell bottled mineral water and packaged food items.

The court rejected the government’s argument that overcharging for pre-packed or packaged products was an offence under the Legal Metrology Act, which attracts a fine of Rs 25,000 or a jail term, according to ET.

A bench headed by Justice Rohinton Nariman said the provisions of the law will not apply to hotels and restaurants, and these establishments cannot be prosecuted for selling such items above the MRP.

"It is not a case of simple sale. Nobody goes to a hotel to buy or take away a bottle of mineral water," the bench observed, hearing a petition by the Hotels and Restaurant Association of India.

Earlier, in its affidavit in response to a petition filed by the Federation of Hotel and Restaurant Associations of India (FHRAI), the Ministry of Consumer Affairs said that overcharging for pre-packed or prepackaged products was an offence under the Legal Metrology Act.

"Sale of packaged water over MRP by hotels and restaurants may have implications regarding tax evasion as a bottle purchased by a hotel at cost price, which should be sold at MRP or less, is being sold at much higher prices, leading to possible loss of additional revenue to the government in the form of service tax or excise duty etc.," the government had said.

Consumer complains

The sale of bottled drinking water above the MRP has been a subject of intense debate since 2003 when the hoteliers’ association approached the Delhi High Court challenging penal provisions of the law.

The high court ruled in 2007 that Delhi’s hotels and restaurants cannot sell bottled mineral water above the MRP.

Earlier this year, Union Minister of Food and Consumer Affairs, Ram Vilas Paswan tweeted about receiving various complaints on different prices charged for packaged water in different places. Many grievances about companies that printed prices higher than the MRPs at places like hotels and airports were lodged. The Ministry has demanded justification from such companies for their offences. "Mineral water bottle will be available at the same rate at airports, hotels and malls," he tweeted. It has been directed that the selling price should be standardised across airports, hotels, malls, and any other retail outlets.

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