Hotel forum defends banana pricing

The Federation of Hotel & Restaurant Associations of India (FHRAI) has clarified that JW Marriot hotel has not done anything illegal by charging Rs 442 for pair of bananas.

It reiterated that charging 18% GST was a legal requirement. “Chain hotels have presence across several cities and follow Standard Operating Procedures (SOPs). 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 supply of food and beverages to its guests," said Gurbaxish Singh Kohli, vice president, FHRAI.

"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. A coffee available at ten rupees at a roadside stall could be served at Rs 250 in a luxury hotel,” he said.

FHRAI also clarified that the hotel has done the right thing by charging 18% GST.

"GST laws are not optional, but are to be charged to the customer and passed on to the Government as per provisions of the law," it said, and added that the rate for supply of services including goods by a restaurant is 9% CGST and 9% UT GST, which was charged justifiably.

“Food served within the premises of a hotel with a declared tariff for accommodation of Rs 7500/ day and above is chargeable under Services Accounting Code 9963 at the rate of 9% CGST and 9% 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% is applicable. This is what the laws demand of us, and we don’t have a say in the matter,” says Pradeep Shetty, joint honorary secretary, FHRAI.

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