MRP on Water Bottles

New Delhi: The Supreme Court has allowed hotels and restaurants to sell bottled water and other packaged products at above the maximum retail price printed on these items. The apex court said that they can also render a service and cannot be governed by the Legal Metrology Act.

The government threatened those selling bottled water at more than its maximum retail price (MRP), including at restaurants, hotels, and multiplexes could attract heavy penalty and jail terms.

The government on Tuesday informed the Supreme Court that there was a provision in the law that penalizes selling of packaged drinking water above its MRP.

Submitting its affidavit in response to a petition filed by the Federation of Hotel and Restaurant Associations of India (FHRAI), the Consumer Affairs Ministry has maintained that overcharging for pre-packed or prepackaged products was an offense under the Legal Metrology Act (LMA).

However, in response to the affidavit, the apex court said when hotels and restaurants sell food and drinks, they also render a service, making it a composite transaction with composite billing and MRP rates cannot be insisted upon for such entities.

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"The court in its judgment said there are a whole lot of other services that go with being served in hotels and restaurants and prosecution under the Legal Metrology Act for alleged breach of MRP prices cannot be launched," a lawyer who was present at the hearing was quoted as saying from the Economic Times.

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.

Section 36 of LMA clearly says anyone caught selling; distributing or delivering any pre-packaged commodity that does not conform to the declarations on the package shall be punished with fine up to Rs 25,000 for the first offence. It can increase to Rs 50,000 for the second offence and subsequent offences can attract a fine of up to Rs 1 lakh or imprisonment for one year or both.

The sale of bottled drinking water above the MRP has been a subject of intense debate since 2003. The Delhi High Court in 2007 had ruled that hotels and restaurants in the capital cannot sell bottled mineral water over and above the MRP to customers, who visit them and enjoy their other services and facilities.

With recent cut in GST rates on about 200 items, the government has allowed companies to paste a price sticker on packaged products to reflect new MRP until December.

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