Following the presentation of the Union Budget 2022 by Finance Minister Nirmala Sitharaman, the National Restaurant Association of India (NRAI) released its reaction, expressing its disagreement with the annual financial document. In the open response to the Center, NRAI Chairman Kabir Suri called for “immediate cash support” as well as an “immediate streamlining of the current GST structure”.
Elucidating that the foodservice industry is one of the sectors hardest hit by the COVID-19 pandemic, the Association claimed the “highest morality rates”.
“The restaurant industry looked forward to immediate cash support, restoration of the GST Input Tax Credit (ITC), ease of doing business through over-regulation and over-licensing , a fair and equitable e-commerce policy for the survival and recovery of the restaurant industry from the Honorable Minister of Finance today,” the letter reads.
Referring to the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 23 and an additional Rs 50,000 crore for hospitality, the NRAI chief hinted that support more direct and immediate could be granted.
The extension of the ECLGS “will allow for a one-year extension of the moratorium for loans granted under the ECLGS program, but it could alleviate the current liquidity problems only for certain companies that have existing credit lines or sanction loans available ongoing,” the letter read.
“…no specific announcements have been made for the restaurant industry and we are once again on our own,” he added in the letter.
“The food industry, the hardest hit by the COVID-19 pandemic”
Detailing the setback of said industry, Suri said, “In FY21, India’s foodservice industry contracted severely resulting in the permanent shutdown of over 25% of food business operators. , which resulted in the loss of jobs of almost 24 Lakh. In FY21, the Foodservice industry in India decreased by 53% and was estimated at INR 2,00,762 Cr compared to INR 4,23,624 Cr in FY2020.”
Requests from the National Restaurant Association of India
- An immediate streamlining of the current GST structure. The restaurant industry has been singled out for the elimination of the input tax credit (ITC).
- The Indian government should reintroduce ITC for restaurants.
- Strong and fair e-commerce policy in the restaurant sector.
- A uniform policy that includes one-stop customs clearance and reducing the number of licenses required to operate a restaurant.
- The government should recognize the growing contribution of restaurants to the economy and give it “industry” status.