JW Marriott was under fire last week after Bollywood actor Rahul Bose was sent a bill of Rs 442 for two bananas. The actor had taken to Twitter to share his dismay for the exorbitant amount he was asked to pay for what the hotel termed as a fruit platter.
The five-star restaurant was also under the radar of Chandigarh's Deputy Commissioner and Excise and Taxation Commissioner Mandip Singh Brar. A probe was ordered and JW Marriott was fined Rs 25,000.
Another reason the hotel received a lot of criticism was for charging GST for fresh fruits and vegetables, which according to experts, are not under a tax slab.
The Federation of Hotel & Restaurant Associations of India (FHRAI) has now clarified that charging 18 percent GST on the fruits was a legal requirement for the hotel. A statement read that the hotel did the right thing by charging 18 percent GST and the customer is legally required to pay the billed amount.
"We need to understand that the hotel is not engaged in the sale and purchase of fruits and vegetables but it provides service of accommodation as well as restaurant service which include the supply of food and beverages to its guests. Unlike a retail store where bananas can be purchased at market price, a hotel offers service, quality, plate, cutlery, accompaniment, sanitized fruit, ambience and luxury and not the commodity alone. Coffee available at Rs 10 at a roadside stall could be served at Rs 250 in a luxury hotel," FHRAI Vice-President Gurbaxish Singh Kohli said.
FHRAI also went on to say that the hotel, as an establishment, does not sell fruits and vegetables but they provide a service and the GST is applicable whether it is a 'fruit platter or a whole fruit.
"So, while bananas, or other unpacked fruits, are outside purview of GST at a retail store, when served in a restaurant or hotel, whether as a fruit platter or a whole fruit, as per existing GST laws a levy of 18 percent is applicable. This is what the laws demand of us, and we don't have a say in the matter," said Pradeep Shetty, FHRAI Jt. Honorary Secretary.
DVS Somaraju, the Treasurer of FHRAI, said that the immediate need for concern is sensitizing the staff regarding matters like these and teaching them how to behave in such a situation arises.
"We do not wish for guests to experience a situation like this and are deliberating on possible measures that hotels could take. We will advise our members to sensitize the staff on the subject and will advise precautionary measures to avoid such happenings in the future," Somaraju said.
