FHRAI justifies charging actor Rs 442 for 2 bananas

Wednesday, 31 July 2019 (13:45 IST)
Kolkata:The Federation of Hotel and Restaurant Association of  India today clarified that the five-star hotel which charged actor Rahul  Bose Rs 442 for two bananas has done nothing illegal.
In an e-mailed statement to UNI here, FHRAI also reiterated that charging  18 per cent GST was a legal requirement incumbent upon the hotel.
 
'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. 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,' Mr Gurbaxish Singh Kohli, Vice- President, FHRAI, was quoted as  saying.
 
FHRAI also clarified that the hotel has done the  "right thing" by charging 18 per cent GST on F&B served in the hotel  premises. 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 further stated that the rate for supply of services including goods  by a restaurant is 9 per cent CGST and 9 per cent UT GST. It stated that  the hotel has correctly charged the Goods & Service Tax (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.7500/- 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 don't have a say in the matter,' said Mr 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.
 
'Our immediate concern is conflict  resolution and for such a situation to not repeat. 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,' concluded Mr. D V S  Somaraju, Honorary Treasurer, FHRAI.
 
The Federation of Hotel & Restaurant Federations of India is the apex body of the Indian Hospitality industry. (UNI)

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