camsean

I have a cash and points reservation at the ITC Park Sheraton Chennai. I've just taken a closer look at the reservation and it says that "Taxes: Rm Tax On RACK of 12.50% Per Room / Per Night is not included in the rate."

Does this mean that I am going to be asked to pay 12.5% plus 12,000 or 13,000rps? I don't know what the rack rate is as it doesnt show for my dates on spg.com. If so, this would make a cash and points booking crazily expensive.

Thanks for any help.

Starwood Lurker II

Hi camsean,

On Cash & Points Awards, only the amount charged to you is taxed. In other words, the "Cash" portion is taxed.

Hope this helps.

Thank you and have a nice day!

[email protected]

camsean

Hi Thyetus,

Thanks thats a relief. I guess I should have just pmed you. So I can just ignore the part about the rack rate?

bfrederi

While others can likely clarify the official policy better, it's worth noting that all things having to do with taxes in ITC hotels in India could be classified as YMMV. The official policy is important after the fact, and I'm sure customer service could help sort out any issues, but when you actually receive your bill in the hotel the interpretation of the tax law seems to vary widely, at least in my experience. Good luck!

Starwood Lurker II

Hi camsean,

My apologies. The policy on taxes for Cash and Points is still valid for participating properties.

But after verifying with the property(which is a good thing I have done so as I was not so sure), I found out that this policy does not apply to some of the properties located in India which is true for your case.

As such, "Rm Tax On Rack 12.5 Percent Per Room Per Night" is applicable and it is to the Rack rates for Starwood Properties in India.

Once again, pardon me for that.

Thank you and have a nice day!

[email protected]

soitgoes

Why is that?
It used to be that the government in India charged tax on the rack rate, but that changed in 1999!

Example from Delhi:
"12.5% from 01.04.2003 on actual/charged tariff."
http://excise.delhigovt.nic.in/ex5.asp

Starwood Lurker II

Hi soitgoes,

I found a discussion on this in the archive section.

http://www.flyertalk.com/forum/archi.../t-428443.html

Hope this helps.

Thank you and have a nice day!

[email protected]

soitgoes

Thanks for the link, but this actually leaves more questions unanswered than answered. While there are hotels that charge the tax based on the rack rate, there are real questions about whether they are required to do so or even if they remit those collections to the government in the amount they exceed the charged rate.

I'd expect Starwood to be more aboveboard than that.

camsean

Thanks everyone. At least I know now and can weigh up my options.

I would suggest that maybe this should be highlighted during the reservation for the properties affected because it is something that is different to every other Cash and Points booking I've ever had.

I only had a suspicion there might be an issue because I vaguely remembered reading something here. I imagine people who weren't FTers would get a nasty surprise at check-out.

GUWonder

If it leaves more questions unanswered than answered, then it does but it's not an issue unique to Starwood.

Hotels in certain jurisdictions in India charge the tax based on the rack rate of the room occupied -- which can be insanely high if given a free upgrade.

On points-only stays, the guest does not pay room taxes regardless of room type, and it is in compliance with this that Starwood's hotels in Delhi -- where I last used points -- did not charge any taxes.

On a cash+points stay in Delhi, I am not sure what the current situation is; but the tax authorities can go after the hotel for taxes of a guest who is paying a discounted cash rate. I presume that the tax authorities could potentially recognize a cash+points stay as being effectively a discounted cash rate stay since the guest or a party on the guest's behalf other than the hotel owner/operator is paying some money directly toward the occupacy cost of the room. This last part is currently just speculation on my part, but were the tax determined to be due then the tax amount would be the fixed percentage of the filed rack rate of the room occupied.

camsean

It certainly makes cash and points a less attractive proposition in India. I really think that this should be highlighted in the booking process because it is something that isn't in line with all other cash and points bookings.

I would certainly not have had an inkling if I wasn't a flyertalker.

aussieinsf

The joys of travel in Incredible India...

I faced a $60 tax bill for one night at $200/night Sheraton in Delhi (back in the days when a reasonable standard hotel in Delhi could be had for such a dirt cheap rate...). It's a horrendous policy but fairly typical of the bait and switch treatment you will often receive as a business traveler in India. If you want to be truly horrified, check out the threads about tax collection upcharges on airline upgrades ex-Delhi: "Congratulations, you've been upgraded to business class. Would you like me to charge the increased taxes of $1,000+ to your Visa or Amex..."

Compare this to the notification on the Starwood site for the new 2% tax charge in San Diego - prominently linked to from the front page of every hotel.

Why is it so hard to include a notification that says - "Taxes of 12.5% of the RACK rate on the room. As the minimum RACK rate at this hotel is $500 you will be charged a minimum of $60/night in taxes."

camsean

Unfortunately, this is apparently incorrect. The Le Meridian Cochin tells me that it varies from state to state. This is now the third different answer Starwood has given me on this question.

The hotel went ahead and canceled the C and P booking anyway and also canceled a points booking for good measure.

I'm at a loss to understand why they would cancel a booking that was I didn't ask them to and now dread trying to get it re-instated

piyush

Does anybody know what's the latest policy on this? I'm planning to book a room at the ITC Kakatiya and if they charge taxes on rack rate then I will book the points rate instead of the C+P.

Thanks!