Often question arises as to whether hotels and restaurants can charge more than the MRP while serving consumers. There are two landmark judgements in this regard delivered by Delhi High Court – Federation of Hotels and Restaurants Association of India & Ors vs. Union of India & Ors. and Delhi Gymkhana Club Ltd. Vs. Union of India.

The issues in the above cases were (i) whether it was permissible for the hotel to charge the customer more than the MRP printed on the mineral water bottle and (ii) whether it was permissible to charge more than the price printed on soft drink pack. The court had held that charging more than MRP in the above cases did not constitute any violation of the provisions of Standards of Weights & Measures Act.

The rationale for taking such a stand by the court is as follows

1. The customer when going to a hotel/restaurant does not go there only to buy the product but he also enjoys the ambience of the place. Hence it is not unfair on the part of the hotelier to charge more than the mrp provided that the sale price of the product is clearly displayed or printed in the menu.

2. The restaurent provides many services other than simply selling the product. The consumer enjoys the services of the employees and also the comfortable atmosphere in the hotel/restaurant.

Though there is logic in the above argument, but what should be the stand if a consumer is buying packaged product over the counter from the restaurant?

We also often receive complaints with regard to shopkeepers charging more than mrp while selling cold drinks. The extra charge, shopkeepers say, is for cooling. Is this permissible?

In our view, taking cue from the above judgements, shopkeepers can charge a nominal amount as cooling charges for cold drinks while the same product, but not cold, should be available at the printed price. However, this cannot apply for ice cream products as ice cream products are meant to be sold in solid condition which is possible only if the product is kept in cold storage.

It would not be wrong for the shopkeepers to sell the product at more than MRP if the shop is located in a remote place outside the city / town, to compensate for the transportation charge they might incur in bringing products.



This article has 4 comments

  1. Dear Sir;

    Hotels/Restaurants can charged the Value add tax (VAT) on the cold drinks/Miniral waters? whereas he already charged more then MRP.

  2. So I went to Martins corner (situated in Goa)today , and I was charged 180 for a bacardi breezer orange .It was marked 180 on the menu but upon asking the waiter why it was so much , he said they dont care about mrp .I was wondering if it is okay for a restaurant to charge so much for a breezer .If someone could clear out my doubt , that would be great.

  3. I stayed in a hotel for a day…on the day of checking out, we wanted some water since they had only given us 2 tiny water bottles….they asked for 120 rs. Per bottle since we were checking out. 120!!! I don’t think the ambience costs that much in a budget hotel.

  4. I am shopkeeper and we selling cool drinking with additional 2rs for cooling I am not regret for this, because we have received bottle for 2.5 rs profit which is not enough for run business, I think it is reasonable..

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