Chandigarh: Charging Rs 67.50 GST on two bananas costs JW Marriott Rs 25,000

Hina Rohtaki
On July 22, Bose had put up a video on his Twitter handle sharing a copy of the receipt that the hotel sent him for two bananas that he ordered post a workout session. (Source: File)

The public relations disaster that the JW Marriott found itself in after charging actor Rahul Bose Rs 442.50 for two bananas, culminated Saturday when Chandigarh Excise and Taxation department slapped a penalty of Rs 25,000 on the luxury hotel.

The hotel, officials said, has been indicted and penalised for violating Section 11 (1) of Central Goods and Service Tax Act (illegal collection of tax on an exempted item) and Section 8 of UTGST Act.

The hotel has been indicted for illegal collection of tax. They charged tax on bananas which fall under the category of fresh fruits that are tax-free. We have imposed a penalty on them, UT Assistant Excise and Taxation Commissioner Rajeev Chaudhary said.

Giving a break-up, the senior official said that the hotel has been penalised Rs 12,500 each under CGST and the UTGST for charging Rs 67.50 in taxes from the actor for the two bananas.

The penalty has been imposed under section 125 of CGST Act and section 21 of UTGST Act.

On July 22, Bose had put up a video on his Twitter handle sharing a copy of the receipt that the hotel sent him for two bananas that he ordered post a workout session. You have to see this to believe it. Who said fruit wasn t harmful to your existence? Ask the wonderful folks at JW Marriott, the actor, who was in city for a film shoot, had said in a tweet.

The receipt listed the bananas as fruit platter charging Rs 375 for it. The hotel had charged Rs 33.75 each as CGST and UTGST.

As the video and the tweet went viral, spawning hundreds of memes at the expense of the hotel, Excise and Taxation Commissioner Mandip Singh Brar ordered a probe. The department constituted a three-member team that visited the hotel in Sector 35 Thursday and seized relevant records. Excise officials had stated that prima facie, it was also a case of violation of Consumer Protection Act, 1986.

The department had later served a show cause notice asking the hotel to reply by 11 am Saturday as to how they charged GST on a tax-free item.

The hotel authorities could not give a satisfactory reply to our notice. They did come for a personal hearing and sought more time, which we denied. Citizens should be alert and can complain to us wherever they find that they are being charged illegally, Chaudhary said.

Talking to the Newsline, Brar said that the penalty should come as a warning as charging tax on tax free items is illegal .

Meanwhile, the committee, comprising Assistant Excise and Taxation Commissioner Rajeev Chaudhary, and Excise and Taxation officers RL Chugh and Arun Dheer, will continue to probe the records of the hotel to check if they were actually depositing the tax charged on other items with the government or not.

No official statement was released by the hotel authorities till the filing of this report.