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Hotels, Restaurants can sell bottled water above MRP, rules SC

By Deepika
|
Google Oneindia News

In what could be a major setback for the consumers, the Supreme Court on Tuesday ruled that hotels and restaurants are not bound by the maximum retail price (MRP) when they sell bottled mineral water.

Image for representation only

A bench led by Justice Rohinton F Nariman held that provisions of Legal Metrology Act will not be applicable in selling bottled water in hotels and restaurants and therefore, no prosecution can be launched against them for selling above MRP.

The apex court told that the government cannot ask hotel and shop-owners to sell packaged drinking water at the maximum retail price (MRP), and that they were free to charge more.

The court noted that composite elements of sale and service are there in hotels and restaurants where consumers also enjoy ambience, invested into by these commercial establishments.

"It is not a case of simple sale. Nobody goes to hotel to buy or take away a bottle of mineral water," observed the bench.

Earlier, the central government had told the Supreme Court that selling bottled mineral water above the maximum retail price (MRP) will attract monetary penalty and imprisonment for the management of restaurants, hotels, bars etc.

"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.," said the government.

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

OneIndia News (with agency inputs)

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