TLI Staff
New Delhi: Days before presentation of Union Budget 2021, the restaurant industry has pitched for concessional loans and lower GST claiming that 30% of the eateries had closed down while nearly 3 million people had lost their jobs.
The industry body National Restaurant Association of India (NRAI) has said that the relief measures were urgently needed to help businesses survive till consumption regains the momentum by third quarter of next fiscal.
“Restaurant Industry has perhaps seen one of the highest rates of mortality during the pandemic and is gasping for some fresh oxygen. With almost 30% of the restaurants shut down and balance operating at a much-reduced capacity, I reckon that almost 40% of 7.30 million jobs, i.e., approx. three million jobs, have already extinguished,” NRAI President Anurag Katriar said.
“We need some immediate liquidity support to arrest this trend and survive,” he noted.
Suggesting to consider restaurant industry as stressed sector, the NRAI has proposed an immediate rationalisation of the current GST structure.
As per the proposal, eateries with annual turnover of upto Rs 40 lakh should be exempted from GST. It has proposed three slabs of 1%, 5% and 12% for restaurants depending on their annual sales. The industry body claimed that the multi-layered structure will not increase compliance process for smaller and single-owner and single-restaurant companies but will give a significant relief to the larger organised players.
Currently there is a single rate of GST at 5% for restaurants and there is no Input tax credit (ITC).
“The current rate of 5% with no Input Tax Credit (ITC) is structurally flawed. It doesn’t distinguish between a kiosk or a five-star hotel and espouses the principle of “one-size-fits-all”. This needs to change,” said NRAI’s Katriar who is also CEO & Executive Director at deGustibus Hospitality.
The restauranteurs have also demanded a strong and equitable e-commerce policy in the food service sector.
Expressing concern are around lack of data sharing by the aggregators such as Zomato and Swiggy, NRAI noted that the current system is very opaque.
Further, the aggregators create their own brand riding on the restaurant data that they singularly own at present. The restaurant body said that a fresh and a more equitable policy will be a huge help to the sector and help it grow exponentially.
The NRAI claims to represent the interests of 5 lakh restaurant-owners with annual turnover of about Rs 4 lakh crore.