Why is it permissible for hotels to charge more than the MRP?
Even though you might be tempted to spend a little bit more, remember that charging anything above the MRP is against the law.
The MRP cannot be surpassed, although retailers may opt to sell for less.
It’s almost natural to flip the package over and check the price stamped on the back or bottom, whether you’re filling your basket with the necessities at the neighborhood convenience store or purchasing a packet of chips from the store next door. However, what are you viewing?
The price that a manufacturer determines is the maximum retail price, or MRP, and is set as the price at which a product may be sold. In addition to the profit margins of wholesalers and retailers, this also takes into account the cost of production, transportation, and any necessary taxes. All packaged goods are required to have an MRP. Retailers can decide to sell for less than the MRP, or at a discounted price, even if the MRP cannot be surpassed.
But when someone tries to charge you more than the MRP, danger starts to happen. You may have encountered a store owner or grocer who tries to extort a small fee from you for things like having to chill a bottle of cold water on a hot day or shelling out more for transportation to remote locations.
Even if you might feel inclined to pay a little bit more, remember that charging more than the MRP is against the law. According to the Central Legislation of Metrology Act, a retailer that violates the law is subject to a fine of 2,000 yen. Costs like transportation and refrigeration are already accounted for in the MRP.
The MRP regulations’ application, however, is subject to one exception. A Supreme Court bench decided in 2017 that hotels and restaurants might charge more than the MRP for packaged food and bottled water. The justification offered for this was that the aforementioned restaurant or hotel would not just be making a basic sale, as would a store, but would also be offering the clientele extra services like ambiance and silverware. The court ruled that hotels and restaurants are exempt from the law’s requirements and cannot be held accountable for selling things for more than their MRP.
This came after the government filed an affidavit in 2015 asserting that overcharging for pre-packaged goods was illegal and that making it permissible might enable businesses like hotels to cheat taxes.
Therefore, in light of the Supreme Court’s ruling, you must pay the additional fee a restaurant assesses for a bottle of packaged mineral water over and beyond the MRP for only giving you a glass and pouring the water.