Banana Row: FHRAI Says Marriotts Hotel Conduct Not Illegal

Mumbai, Jul 30 (PTI) The Federation of Hotel & Restaurant Federations of India (FHRAI) on Tuesday came in support of JW Marriott Chandigarh, defending the hotel's move to charge 18 per cent GST on two bananas.

FHRAI clarified that the hotel was right to charge 18 per cent GST on food and beverages served in the hotel premises.

Actor Rahul Bose had recently tweeted that the hotel had charged him Rs 442 for 2 bananas, including the 18 per cent GST.

The hotel on Saturday was fined Rs 25,000 by the Chandigarh Excise and Taxation department for levying GST on bananas as fresh fruits are tax free under GST regime, as per media reports.

"Unlike a retail store where bananas can be purchased at market price, a hotel offers service, quality, plate, cutlery, accompaniment, sanitised fruit, ambience and luxury and not the commodity alone. A coffee available at ten rupees at a roadside stall could be served at Rs 250 in a luxury hotel," FHRAI Vice President Gurbaxish Singh Kohli said in a statement.

FHRAI stated that the rate for supply of services including goods by a restaurant is 9 per cent CGST and 9 per cent UT GST, while adding that the hotel has correctly charged the GST on the bill which was legally payable by the customer.

"Food served within the premises of a hotel with a declared tariff for accommodation of Rs 7,500 per day and above is chargeable under Services Accounting Code 9963 at the rate of 9 per cent CGST and 9 per cent UT GST. 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 per cent is applicable.

This is what the laws demand of us, and we dont have a say in the matter," FHRAI honorary joint secretary Pradeep Shetty said.

However, in light of the incident, the apex hospitality body has issued an advisory to its members on ways to handle similar situations where a guest may have ordered eatables, including fruits from outside the menu. PTI

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