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India: Restaurants and hotels to sell mineral water, packaged food above MRP

Staff Writer | December 13, 2017
The Supreme Court allowed restaurants and hotels to sell mineral water and packaged food at more than the maximum retail price (MRP) printed on these items.
India mineral water
Asia   The maximum retail price
A Bench led by justice Rohinton Nariman rejected the government’s argument that overcharging for pre-packed or packaged products was an offence under the legal metrology act that attracts a fine of Rs 25,000 or a jail term for the management of restaurants, hotels, etc.

The Court held that provisions of Legal Metrology Act will not apply to hotels and restaurants and they cannot be no prosecuted for selling products above MRP.

The bench observed that it is not a case of a simple sale as no customer goes to a hotel to buy or take away a bottle of mineral water. A customer goes to a hotel to relax and enjoy the ambience for which services are also involved.

Reports quoted Advocate Sameer Parikh, appearing for the hoteliers’ association saying that the law does not apply as selling packaged drinking water or food “involves a service element, including ambience, cutlery and service.”

The government had argued that selling above the MRP could lead to tax evasion and loss of revenue for the government.

The issue of the sale of bottled drinking water above the MRP has been a subject of debate since 2003.

However, reports state that the Federation of Hotel and Restaurant Associations of India had argued that charging prices for mineral water in excess of MRP during the service does neither violate the provisions of the Standards of Weights and Measures Act/the Packaged Commodities Rules nor the new law.