The Chandigarh Excise and Taxation department on Saturday penalised hotel JW Marriott for charging "illegal tax" on two bananas that cost a whopping Rs. 442.50 to actor Rahul Bose. The five-star hotel was slapped with a penalty of Rs 25,000.
After confiscating relevant records, the hotel was served a showcause notice to which they were supposed to reply on Saturday and also attend a personal hearing.
Fresh fruits are not taxable under the GST law. According to HSN/ Chapter 803, bananas, including plantains, fresh or dried come under zero tax rate and are exempted.
Confirming the development, UT Assistant Excise and Taxation Commissioner (AETC), Rajeev Chaudhary said, " Yes, the hotel has been indicted for illegal collection of tax – because they charged tax on bananas which come under the category of fresh fruits that are a tax free item. Fresh fuits are not taxable as per law. We have imposed a penalty on them."
You have to see this to believe it. Who said fruit wasn t harmful to your existence? Ask the wonderful folks at @JWMarriottChd #goingbananas #howtogetfitandgobroke #potassiumforkings pic.twitter.com/SNJvecHvZB
Rahul Bose (@RahulBose1) July 22, 2019
The AETC said that a penalty of Rs 25,000 has been imposed on the hotel Rs 12,500 under CGST and Rs 12,500 under UTGST for charging the actor Rs 67.5 tax for two bananas. The penalty has been imposed under section 125 of CGST act and section 21 of UTGST act.
The hotel authorities were asked to submit a reply by 11 am today. "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 did not allow. Citizens should be alert and can complain to us wherever they find that they are being charged illegally," Chaudhary said.
Excise and Taxation Commissioner Mandip Singh Brar had ordered a high level investigation to probe GST on two fresh bananas in hotel JW Marriott following a tweet by the actor.
Later, a three member team was constituted by the Excise and taxation department on Thursday that visited the hotel in sector 35 and seized all relevant records. Excise officials had stated that prima facie, the case is also a violation of Consumer protection act, 1986.
While talking to The Indian Express, Excise and Taxation Commissioner Mandip Singh Brar said, "Everyone should be careful as charging tax to citizens on tax free items is not allowed at all."
The committee constituted comprised Assistant Excise and Taxation Commissioner Rajeev Chaudhary, Excise and taxation officers RL Chugh and Arun Dheer. The committee will continue to probe records of the hotel to see if they are actually depositing tax on other items with the government or not.
No official statement has been released by the hotel authorities till now.