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

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.