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hotels and restaurants sell food and drinks, they also render a service

Hotel, restaurants Can Sell Bottled Water, Packaged Product Above MRP 

The Supreme Court on Wednesday allowed Hotel and restaurant to sell bottled water and packaged product above the Maximum Retail Price (MRP). The Court also ruled they would not be governed by Legal Metrology Act (LMA). The matter has been a subject of intense debate since 2003.
The Delhi High Court directed in 2007, Hotel and restaurant are not allowed to sell bottled water above the MRP to its consumers. While, the section 36 of LMA clearly states that, anyone caught selling, distributing and delivering any packaged commodity to its consumer will be punished with fine up to Rs 25,000 in its first offence.The subsequent offender will be liable to pay Rs  50,000 as a fine. And followed by offender will be punished imprisonment of one Year with Rs 1,00,000.
But, the Bench headed by Justice Rohinton Nariman ruled out that, such provision will not be applicable to Hotels and restaurants. And this establishment cannot be prosecuted for selling such items above the MRP.
“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.

Nobody Goes to a Hotel to Take a Bottled Water

Hotel and Restaurants Can Sell Bott;ed Water

“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, the government threatened that selling packed product or bottled water higher than MRP. If anyone found guilty of selling distributing above the higher price than MRP, they were subjected to attract a hefty penalty and jail terms.
According to a report, in 2015, the government once again filed an appeal to prosecute Hotel and restaurants for over charging. In the wake of government’s action, the hotel’s body moved to court and filed an affidavit when they were refused by the High Court.
The Federation of Hotel and Restaurant Associations of India (FHRAI) submitted an affidavit in the Court saying, the Consumer Affairs Ministry has maintained that overcharging for pre-packed or prepackaged products was an offense under the Legal Metrology Act (LMA).

Hotels and restaurants sell food and drinks, they also render a service, SC

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.
Consumer Affair Minister Ram Vilas Paswan had said in March, No private companies can sell any product at two different MRPs. Double MRP is a crime. There is provision to deal with it strongly. (However) MRPs are declared by private companies. (So) We do not know if their MRP and actual production cost have a huge difference.”

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