Hotels and restaurants allowed to charge a price higher than MRP on water bottles

white plastic bottle lot

Hotels and restaurants allowed to charge a price higher than MRP on water bottles

Sabareesh Pillay | School of Law, University of Mumbai Thane Sub-Campus | 24th September 2020

Federation Of Hotel And Restaurant Associations Of India Vs Union Of India

FACTS:

In this case, a writ petition was filed against various hotels and restaurants by the federation of hotel and restaurant associations of India- The petitioner. The concern of the petitioner was that, hotels and restaurants were charging higher price than the Maximum Retail Price (MRP) of Packaged drinking water and that this was against the law as according to the law, no commodity should be charged higher than the Maximum Retail Price. It was alleged that the hotels and restaurants charged higher than the MRP in the garb of providing service and ambience.

ISSUE:

Under section 57 of the Legal Metrology Act, 2009 and under section 366 (29A) (F) of the Constitution of India.

PETITIONER CONTENTION:

The petitioner citing Section 366 (29A) (F) of the Indian constitution:

 “ tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made” 

Said that, according to this law no extra charges should be charged in the name of transfer or supply of goods. So the restaurants and hotels should not be allowed to charge higher amounts.

RESPONDENT CONTENTION:

The respondent contended that all the jurisdictional allegations made by the plaintiff is not valid as in context of the section as according to the section 57 of legal metrology act, that particular section has already been revoked and also emphasized on the concept of the possibility to divide the “service element”, which is the dominant element, from the “sale element”, it is clear that such specific contracts cannot be the subject-matter of sales tax legislation and there is not a particular definition on how to differentiate it. So, there is no curse of action that should be taken against the restaurant or hotels.

JUDGEMENT:

The single bench of Justice R.F Nariman gave the judgment that, charging higher prices of packaged drinking water than that of the MRP printed on the packaging, during the service of customers in hotels and restaurants does not violate any of the provisions as the customer does not only come to the hotel or restaurant to buy the bottled water but also for other things which includes the service and ambience of the particular hotel or restaurant and the customer is aware of these things, thus no action can be taken against the respondents. Thus, the wit petition was dismissed by the Supreme Court.

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29 Comments
  • Avatar
    shubhankar malakar

    its not good cz when they are buying the product from manufacturer the price of bottle 10rs on 20s bottle already 10 rs is profit the sell 200 per day means 200×10 = 2000rs how much they need profit

    • Avatar

      I think it’s ok to charge but at a reasonable price

    • Avatar

      I run a restaurant..i am not sure if our wholesaler is exploiting us but the original bisleri cost’s us 18-19 rs so selling at 20 isn’t possible for us…but we sell all other local brands at 20 as it costs us 12-13 rs.

  • Avatar

    Right said bro ..i agreed. It’s only attack on poor and middle class people.

  • Avatar

    You should also mention the date of the judgement and date of the petition.

    btw, really loved your work and detailing . Great Blog.

  • Avatar

    Rohit Sharma.
    Bottle water is available on MRP at street shops, if people will come to get service of hotel, like highly paid, good furniture’s, AC and good ambience, then they have to pay for extra.

    • Avatar

      In that case, it has to be charged as service charge. The supreme court judge was foolish enough because then, I can charge you a hundred rupees for a bottle that costs 20 on MRP. I would also carry my own water to the restaurant.

  • Avatar

    You all are wrong, because in hotels and restaurants we don’t give only material and water bottles..etc..but with this we give services also like serving the bottle and glasses also..so PLZZ keep it in ur mind..that there’s a difference between shop and restaurants..got it..

  • Avatar

    ಜೈಕರ‌್ನಾಟಕ

    ೧೭೧೧ ರೂಪಾಯಿ ನಾವು ಪಡೆದ ಆಹಾರ ಸೇವೆಗೆ ನೀಡಿರುವಾಗ ೨೦ ರೂ ನೀರಿಗೆ ೨೫ ಪಡೆದಿರುವುದು
    ಅನ್ಯಾಯ. ನೀರನ್ನು ಅವರೇನು ತಂಪಾಗಿಯೂ ನೀಡಿರುವುದಿಲ್ಲ .

  • Avatar

    Hotels are not selling bottled water alone and charges are for the services and ambience along with other services. No one is coming just to buy water there and hence it is not affecting the poor as someone mentioned above. Of course the restaurant offers purified water along with food free of cost and charged only for bottled water. So not affecting middleclass too if they consume the normal purified water (better than bottled water for health!!). Also such high end hotels are not selling 200+ water bottles in the restaurant as you mentioned!!

    • Avatar

      185 రూపాయిలు మేము పొందిన ఆహార సేవకు 20 రూ నీరికి 25 పొందడం
      అన్యాయం. నీటిని చల్లియు ఇవ్వలేదు

    • Avatar

      what rate is justified.
      there must be some limit above mrp.
      yesterday in one restaurant in Visakhapatnam, they charged rs 85 + 5% service + 5% GST.
      so for 20 rs mpr bottle they are charging Rs 93.5.
      can anyone justify it.

  • Avatar

    If, Restaurants gives free RO water then they taken extra charged on MRP its correct. Because good furniture’s, AC and good ambience, then they have to pay for extra. Please co-ordinate of If who wants MRP they can bring in outside.

  • Avatar

    If you are a really middle class pepole why don’t you by from a retail shop where you can get this thing in MRP price or in a hotel or restaurant just drink normal water rathar than drinking Bottle water.

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    Yesterday I was in Kanchipuram. Had my lunch in GRT resturant. They charged me Rs.80 per bottle. Where as MRP is Rs 60. Imagine in which business someone gets profit or 300% on MRP rate? It was annoying and disgusting. Our government talks about transformation of India. Probably, this is one the transformation to match with global water prices..

  • Avatar
    Mohammad Arafath Rashid

    Supreme court had already dismissed the petition in the year 2000, hotels and restaurants are serving bottle water to their guest in such a place where AC and fellow service personal serve at their table or else at their rooms, a high end hotel cant sell more than 30 + no. per day… people staying at hotels paying more than 3000 + INR will not be effected while paying 20/30 bugs extra….

  • Avatar
    Mohammad Arafath Rashid

    Supreme court had already dismissed the petition in the year 2000, hotels and restaurants are serving bottle water to their guest in such a place where AC and fellow service personal serve at their table or else at their rooms, a high end hotel cant sell more than 30 + no. per day… people staying at hotels paying more than 3000 + INR will not be effected while paying 20/30 bugs extra….

  • Avatar

    Today I went to a restaurant, CAFE COFFEE BAR, Dwarka, sector-12, New Delhi. I had my foods and beverages. Coming to the main point, they charged me 70 Rs for water bottle, (MRP- 20Rs). Rs70+ 10% S.C. + 2.5% CGST+ 2.5% SGST. I paid almost Rs80 for the Rs20 kinley water bottle.and I one more thing, I don’t have regular or normal purified water option.

  • Avatar
    अजय खंडेलवाल मुरार ग्वालियर

    ये बिलकुल गलत निर्णय हे कोर्ट का ,रेस्टोरेंट में मेन्यू कार्ड में अन्य चीजों के रेट तो लिखे होते हे परंतु वाटर बोटल का रेट प्रिंट नही होता, वो केवल बिल आने पर ही पता चल पाता है कि वाटर बॉटल के रेट मनमाने लगे हुए हे, रिसेंटली ग्वालियर में भी होटल सेंट्रल पार्क में 20/- की पानी बॉटल के 65/रुपए लगा रखे थे
    यानी नियमो की आड़ में जमकर पब्लिक की लुटाई
    लगता है कोर्ट को भी इन चीजों की परवा नहीं हे।

  • Avatar

    In my opinion it’s totally wrong.
    Hotels can make a deal with bottle companies and print higher Mrp just like malls do.

    But most of the hotels now charging 35/- for 20/- bottle. Service is other thing
    And in return 5% gst will also be applied on these bottles additionally

    Then why restricting this offer only for hotels
    What poor shops did.
    Shops are also storing in refrigerator so supreme court make a law that even shops can sell whatsoever price to customers

    Literally govt is allowing people to loot poor and middle class ones
    Print higher mrp and sell dudes no one objects

  • Avatar

    Can a resrurant charge Rs.245 for a Coke Can MRP Rs.40 only. Is it justified from students of around 18 years of age

  • Avatar

    Well then we should now carry water bottles like in schools to avoid paying extra in restaurants and hotels. I hope the hotels or restaurants won’t object to i.e. remember a day in KOLKATA due to extreme scorching heat I was desperately searching for water. No shops had packaged drinking water and I was forced to pay Rs 30/- for a Rs 20/- bottle. I did not take any other servicemen the ambience( since the ambience was not worth it) or cutlery from the restaurant where I bought the water. In this case what would honorable Supreme Court say?

  • Avatar

    I am doing dinner an a hotel and hotel Wale mrp se jada bill vasul rhe hai nd GST alag se

  • Avatar

    there must be some % fixed to such hotels for prices

  • Avatar

    How to track GST invoice raised by restaurant or any shop on GST portal . Is there any seach tool available on govt site . When this happened then we will get assurance that they are paying our Tax to Govt .

  • Avatar

    Mrp is there for a reason . If it’s ok to breach it every now and then there’s no point of an MRP. Restaurants charge service tax which should include whatever they are doing.. dominoes n other brands charge 60 for a come bottle which is otherwise 20 .. for what? They don’t provide a cup , even if they do , what’s the cost of a paper cup? I ordered water at another restaurant and learned it was 320 oops , ph modified water it seems! It’s not right that people are extorted in this way by restaurants, theatres and other food retail brands.. there should be a more stronger law against this .. Pl make immediate amendment if you can

    This needs to be set right

  • Avatar

    Then why even MRPs are printed on the bottles or any packaged items. Let all the restaurants sell it for whatever price suits them.

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LexForti Legal News and Journal offer access to a wide array of legal knowledge through the Daily Legal News segment of our Website. It provides the readers with the latest case laws in layman terms. Our Legal Journal contains a vast assortment of resources that helps in understanding contemporary legal issues.

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