Paswan weighs in: 5-star hotels cannot overcharge

Five-star hotels charging exorbitant rate for food items like bananas and eggs is 'unfair trade practice' and the government will seek explanations from them, Food and Consumer Affairs Minister Ram Vilas Paswan said on Tuesday. 

The minister asserted that provisions will also be made while framing rules and regulations under the recently enacted Consumer Protection Act to crack down on such cases. 

Paswan was referring to a video that recently went viral in which actor Rahul Bose was seen complaining about five-star hotel JW Marriott, Chandigarh, for billing two bananas for Rs 442. One more complaint of charging Rs 1,700 for two boiled eggs by another 5-star hotel has also gone viral on social media. 

"There are complaints and reports in social media and media about overcharging by some five-star hotels for items like bananas and eggs. This is a serious and unfortunate matter," Paswan told reporters in New Delhi. 

The minister wondered how five-star hotels could charge Rs 442 for two bananas and Rs 1,700 for two eggs when these items were sold in the open market at very cheap rates. 

"How much they (hotels) will charge for services offered," he quipped. 

Paswan said the department will seek explanations from the fiver-star hotels concerned on what basis they have charged such huge amounts. 

"We will not allow dual MRP (maximum retail price)," he said, adding that the government will make rules to check such practices under the Consumer Protection Act that was recently passed by Parliament. 

Speaking on the sidelines after the minister's press conference, Consumer Affairs Secretary Avinash K Srivastava said, "Prima facie it is an unfair trade practice. As the minister has directed, we will seek explanations from these hotels." He further said that action would be taken against such hotels if they are found indulging in such unfair practices. 

The Federation of Hotel & Restaurant Associations of India (FHRAI) had however defended JW Marriott, Chandigarh, when the controversy broke out saying the hotel did not do anything "illegal" and asserted it did the right thing by charging 18 per cent GST on food and beverages served in the hotel premises. 

The FHRAI had argued that unlike a retail store where bananas could be purchased at market price, a hotel offers service, quality, plate, cutlery, accompaniment, sanitised fruit, ambience and luxury, and not just the commodity alone.