Industry representatives discussed key issues, including providing support to the sector that employs over 7 million people, working capital support, and invocation of force majeure on rentals
NEW DELHI: As the restaurant industry stares at significant job losses amid a slump in business due to the covid-19 lockdown and after the government's stimulus package offered little relief to the sector, the National Restaurant Association of India (NRAI) met finance minister Nirmala Sitharaman to seek policy and liquidity support.
Four members of the NRAI that represents the interest of scores of small and large restaurant chains in a video conference with the finance minister on Thursday, discussed key issues, including providing support to the sector that employs over 7 million people, working capital support, and invocation of force majeure on rentals on a par with that offered to the real estate sector.
“Within a few days of the announcement of the economic stimulus package where the hospitality sector did not receive any specific relief despite widespread speculation, a four-member delegation of NRAI had a meeting with the finance minister yesterday to discuss urgent industry-specific issues," the NRAI said in a statement on Friday.
The meeting was also attended by the economic affairs secretary and revenue secretary.
“We conveyed to them that we are fighting a grim battle for our existence and we will need urgent policy and liquidity support from the government to survive this phase. Each issue was discussed in detail and she has promised to look into all of these issues at the earliest," Anurag Katriar, president of NRAI, and CEO and executive director of deGustibus Hospitality, said in the statement.
Katriar said the minister and other officials accepted the fact that the sector needed urgent policy support. “I am very confident that this meeting will accrue some positive outcome for the sector in times to come," he said.
The NRAI said it has requested for an “unemployment pay support for lower end employees through ESIC corpus. Out of approximately 3.20 crores beneficiaries of the ESIC scheme, over 50 Lakh belong to the hospitality sector".
The delegation also sought urgent working capital support “at the lowest possible interest, as close to the repo rate".
The NRAI placed another earlier ask of allowing an option for the restaurant industry to avail Input Tax Credit (ITC) on GST. "Proposal was made to have dual rates, current 5% for those not availing ITC and 12% for those availing ITC," the NRAI said in its statement. A request was made to expedite the refund for all pending tax claims at the earliest, as well.
Malls and restaurants were the first to be impacted by India’s lockdown as several states directed them to shut even before the were announced late March. The protracted lockdown has caused several restaurants to lose significant business.
Estimates put together by CRISIL Research, earlier this month, suggested India’s organised dine-in restaurants are likely to register a 40-50% drop in revenue this fiscal.
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