How 5-Star Hotels Justify Charging Exorbitant Rates For Common Items

After actor Rahul Bose revealed the exorbitant amount he was charged for two bananas at a Chandigarh hotel, a patron on Sunday said he had been billed Rs 1,700 for two boiled eggs at Mumbai’s Four Seasons Hotel.

Author-photographer Karik Dhar tweeted out a picture of his bill, renewing debate on how much star hotels charge for common items. 

The bill copy shared by Dhar showed omelettes also priced at Rs 850, while a Diet Coke went for Rs 260.

After actor Rahul Bose complained about paying Rs 442 for two bananas at Chandigarh’s JW Marriott, the Chandigarh Excise and Taxation department penalised the hotel for charging “illegal tax” on the bananas.

Excise and Taxation Commissioner Mandip Singh Brar had ordered a high-level investigation to probe the GST levied on the fruit.

However, the Federation of Hotel & Restaurant Associations of India had come out in support of the hotel and backed it for charging the high amount.

In its statement, FHRAI said , “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 includes supply of food and beverages to its guests,” said the federation.”

“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,” said FHRAI Vice President Gurbaxish Singh Kohli.

“While bananas, or other unpacked fruits, are outside the 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 don’t have a say in the matter,” joint secretary Pradeep Shetty said .

However, post the incident with Rahul Bose, the apex hospitality body issued an advisory to its members on ways to handle such situations with guests.