Rs. 8,000 Fine for Charging Extra GST of Rs. 1: Know more

Bhopal restaurant has been fined Rs. 8,000 by the city’s Consumer Forum for charging extra Rs. 1 as Goods and Services Tax (GST) on a bottle of water bought by a consumer. The order came almost four years after the complaint was made, closing a consumer rights case that had started in October 2021.

The problem began when a customer went to the restaurant with a group of friends and noticed that the restaurant was taking Rs. 29 for a bottled water course which had its Maximum Retail Price (MRP) printed as Rs. 20. Out of the Rs. 9 over and above, Rs. 1 was taken as GST. The customer complained to which the restaurant staff replied that the practice of charging was common and did not give any refund.

The issue was subsequently brought to the Consumer Forum. In the legal hearings, in the case of the complainant, it was contended that the restaurant had charged extra by exceeding the MRP marked on the label of the bottle, which was illegal. The legal representative of the restaurant argued that the restaurant could charge extra in light of the extra services offered, including sitting arrangements, air conditioning, and table service.

Consumer Forum, however, would not let this pass. It felt that GST in packaged water etc. is already charged in the printed MRP and hence charging additional Rs. 1 in the guise of GST was a gross service deficiency.

The forum instructed the restaurant to refund Rs. 1 as GST charged. The restaurant was also instructed to pay Rs. 5,000 for mental distress and substandard service and Rs. 3,000 towards charges of litigation. This took the compensation up to Rs. 8,000.

The case serves as a reminder that businesses need to adhere to consumer protection norms and cannot add an extra cost on goods sold on MRP, irrespective of the service situation.