New Delhi: Hotels and restaurants can sell bottled drinking water and other pre-packed foods above the Maximum Retail Price on their premises, the Supreme Court said on Tuesday, the Hindustan Times reported.
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.
“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.
Advocate Sameer Parikh, appearing for the hoteliers’ association, said the law does not apply as selling packaged drinking water or food “involves a service element, including ambience, cutlery and service”.
The ministry of consumer affairs, which had filed an affidavit before in the case, had argued that selling above the MRP could lead to tax evasion and loss of revenue for the government.
“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.
The government also argued that charging more than the MRP was a form of tax evasion. “…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,” the ministry said.
In March, the Centre had asked all establishments to comply with the law and sell packaged mineral water only at the maximum retail price.