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As the voice of the Indian restaurant industry, we represent the interests of 500000+ restaurants & an industry valued @ USD 4 billion. Whether a chain or independent restaurant, the NRAI is here to help every step of the way. Join us!


Union Budget 2022 | No respite for restaurants, left to fend for themselves, says NRAI



The restaurant industry, which was looking at restoration of input tax credit on the goods and services tax besides some liquidity support, remained disappointed with the Union Budget 2022 at a time when the businesses are reeling under the COVID-induced restrictions.”It was very disappointing to see that no specific announcements were made for the restaurant industry and we are yet again left to fend for ourselves,” Kabir Suri, President of the National Restaurant Association of India (NRAI) and co-founder of Azure Hospitality, said in a statement.Multiple state governments have restricted timings for eateries to curb the spread of COVID-19. This has dealt a massive blow to the business and these outlets are trying to claw back to the pre-pandemic levels.”While the hospitality sector was mentioned for the first time by Nirmala Sitharaman when she announced the extension of Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023, but it may ease current liquidity issues only for some businesses which have existing credit lines or outstanding sanction available loans,” said Suri.Introduced by the finance ministry in 2020 to help micro, small and medium enterprises (MSMEs) overcome the COVID-19 blues, ECLGS was extended till March 2023 by Finance Minister Nirmala Sitharaman in her Budget proposal.The ECLGS was launched in 2020 with the aim to provide 100 percent guaranteed coverage to banks, non-banking financial institutions (NBFCs) and other lending institutions in order to enable them to extend emergency credit to business entities that have suffered due to the Covid-19 pandemic and are struggling to meet their working capital requirements.It was launched as part of the Rs 20-lakh-crore COVID-19 relief package called the Aatmanirbhar Bharat Abhiyan. The scheme aimed to provide Rs 3 lakh crore worth of collateral-free, government-guaranteed loans to MSMEs across India.Restaurants have been one of the most impacted sectors since the outbreak of the COVID-19 pandemic across the world. Around 25 percent of food business operators in India called it quits during the financial year 2021 resulting in 24 lakh job losses, as per NRAI.The industry body estimates that the food services industry in India declined by 53 percent to Rs 200,762 crore in 2021 from Rs 423,624 crore in 2020.”The restaurant industry has perhaps seen one of the highest rates of mortality during the pandemic and is gasping for fresh air. The industry employs 73 lakh people and is one of the largest employment generators for the economy. We need some immediate liquidity support with lower collateral, lower interest and adequate moratorium for survival,” said Suri.”For our revival, we definitely need an immediate rationalisation of the current GST structure. The restaurant industry has been singled out by removal of the input tax credit (ITC). The very concept of ITC is central to and is in fact the raison d’être of GST, which is to prevent cascading of taxes. Ours is the only industry which does not receive this benefit,” he said.There are three B2B service industries closely linked with the sector – banking, insurance and real estate – and these were allowed ITC on any supply of goods, including capital goods, after the GST. “We would urge the government to re-introduce ITC for restaurants,” Suri said.The association also sought a uniform policy, including a single-window clearance to start businesses in this sector. “It takes over two dozen licences and permissions to be able to serve a sandwich. Rather than serving our customers, most of our time is spent running around departments,” said Suri.

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