Hotels and restaurants can sell bottled water above MRP: Supreme Court

New Delhi: The Supreme Court on Tuesday observed that hotels and restaurants were not bound by the maximum retail price (MRP) for selling bottled water. Earlier the same day, the Centre had told the court that selling bottled mineral water above MRP would attract monetary penalty and jail term for the management of restaurants. It claimed overcharging would amount to tax evasion.

“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.

Also Read: Jail or fine for anyone who sells mineral water above MRP: Centre tells Supreme Court

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

The court noted that there are composite elements of sale and service in hotels and restaurants where consumers also enjoy ambience. “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.It rejected the government’s argument that even a sale in hotels would require mandatory compliance with the provision of the Act and that there would be a jail term and fine for selling above MRP.