A recent Supreme Court order has come as a major blow to consumers as it allows hotels to charge more than the actual MRP of bottled water No, beta, we can’t have more water today.
Little did they know that all these years of savings, which were meant to buy an extra two-night stay in the hotel, would be spent on buying mineral water bottles.
But the recent order of the Supreme Court came as a major blow to consumers when it allowed hotels to charge more than the actual MRP of the bottled water.
The apex court held that hotels and restaurants are not bound by the maximum retail price (MRP) when they sell bottled mineral water and packaged food items.
“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.
In its affidavit against Federation of Hotel and Restaurant Associations of India (FHRAI), the government had said that: Charging more than the MRP for pre-packaged or pre-packed products in hotels and restaurants was an offence under the Legal Metrology Act; Selling bottled mineral water above MRP would attract monetary penalties and jail terms for the management personnel of hotels and restaurants; Overcharging for pre-packed or packaged products was an offence under the Legal Metrology Act that could attract a fine of 25,000 or a jail term; “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,” it said.
Nobody goes to a hotel to buy or take away a bottle of mineral water,” the bench observed.
FHRAI’s response The Federation of Hotel and Restaurant Associations of India (FHRAI) had filed a special leave petition against the Union of India and the decision came in their favour.
There is a service that is rendered.
letters@tehelka.com (Published in Tehelka Magazine, Volume 14 Issue 23, 24, Dated December 22, 2017)