Budget 2022: Restaurant industry calls for reinstatement of input tax credit in Budget 2022
“The most important thing we need right now after two years of immense difficulty is the restoration of the input tax credit. This will allow the already beleaguered industry to keep its head out of the water. It’s available for other industries and it’s our number one humble request,” said Zorawar Kalra, Managing Director of Massive Restaurants which manages brands such as Farzi Café, Made in Punjab and Bo Tai. Kalra said without the reinstatement of the input tax credit, many will struggle to survive for the next 12 months. .
“Also the possibility of furlough schemes like in the UK. We are also calling for the availability of very low interest working capital loans to help people restart their business as every lockdown requires start-up capital important,” he added.
Rahul Singh, Founder and CEO of The Beer Café, said that with an industry battered three times over the past two years, only the budget’s intent to keep the sector alive and restore jobs is the humble industry expectation.
“Specifically, the enhancement of the ECLGS, ABRY relief and the reinstatement of the GST input tax credit will provide the necessary impetus for recovery,” he added.
Priyank Sukhija, CEO of First Fiddle, which runs brands such as Lord of the Drinks, Cafe JLWA, Diablo and The Flying Saucer, said the industry was desperate for help and the input tax credit needed be restored as soon as possible. Sukhija had closed all but one of its outlets in Delhi after the government imposed a business dinner ban due to the surge in Covid cases.
“We are spending so much money to build the restaurants. It is high time the input tax credit was reinstated. The government does not care. There should also be a special sanctioned loan for the industry” , he added.
Miten Shah, co-founder of The Studs Sports Bar & Grill, said developments such as multiple operating hours restrictions, capacity restrictions, lack of owner support have all made things difficult for the restaurant industry, which contributes more than 10% to the overall employment of the country’s “young” working class. He said the industry wants the GST input credit reinstated on capital expenditures, rentals and many other expenses.
“We need government support to get back on our feet. We pay 18% GST, but we are not deducted from taxes collected from customers. This significantly affects our bottom line. It is the least the government can do to give some relief to an already struggling industry,” he added.
Debaditya Chaudhury, managing director of Chowman, a Chinese restaurant chain in eastern India, said it would be hugely beneficial if restaurants could avail the GST input tax credit as before. “The GST input tax credit can provide much-needed relief to restaurateurs across India in terms of profitability,” he said.
Cloud kitchen brands are hoping for some relief until some revenue hits the leaves. “Any cloud kitchen operation requires the purchase of machinery and appliances which may be subject to machinery endowment programs under government manufacturing assistance, which is not yet reflected “said Manjari Singh, co-founder of The Chhaunk.
“There must also be a defined definition of the qualification and definition of cloud kitchen which is currently defined under the e-commerce food business operator, even making last mile delivery operators operate as online kitchens. cloud, which is not the exact case,” she added.
Rachel Goenka, founder and CEO of hospitality business The Chocolate Spoon Company, said for the 2022 budget the government needs to take notice of the outsized economic toll of Covid on the hospitality industry. “If the government wants to attract investment to revive the industry, important issues need to be addressed, such as GST input tax, industry status for the hospitality sector, and licensing permissions. one-stop shop to make doing business easier rather than increasing the cost of doing business,” she said.
She said tax rationalization, liquidity support, moratoriums and incentives would be essential for the long-term health of the industry. “We would welcome changes to the Income Tax Act to allow business losses to be carried forward for 10 to 12 years as well as to allow for depreciation of capital or operating losses. Finally, license renewal deadlines should be extended from one year to at least 3 years. -5 years.”