NRAI Advocates Comprehensive Reforms for Restaurant Industry in Budget 2024

The National Restaurant Association of India (NRAI) urges for a significant overhaul of the restaurant industry and proposes key reforms ahead of the Union Budget. One of the pivotal suggestions is the reinstatement of the input tax credit for Goods and Service Tax (GST).

The association argues that this change will bring equity to restaurants operating at a 5% GST rate without input tax credit benefits. To balance this, the NRAI recommends increasing the GST rate to 12%, aiming to streamline compliance and enhance profitability, especially for smaller enterprises.

Dedicated Food Services Ministry Proposal

NRAI emphasizes the need for a dedicated food services ministry or department, justifying it by the industry's substantial contribution of approximately ₹4.23 trillion annually to the economy. The establishment of such a body is expected to streamline the regulatory framework, simplify compliance, and foster growth in the sector.

Industry Status for Access to Financing

The association calls for granting "industry status" to the restaurant sector to facilitate easier financing and subsidies. This move aims to support the growth of businesses within the industry by providing them with the benefits associated with recognized industry status.

NRAI's Holistic Demands for the Restaurant Sector

Balanced E-commerce Policy

NRAI demands the formulation of a balanced e-commerce policy to shield restaurants from unfair competition. The association emphasizes the importance of addressing operational challenges, including the reduction of GST on commercial rentals and the simplification of licensing processes.

Extended Business Hours and SME Support

Advocating for extended business hours, NRAI believes this will contribute to India's progress toward becoming a $5 trillion economy. The association also calls for targeted subsidy schemes and easier access to debt financing for Small and Medium-sized Enterprises (SMEs), particularly in smaller towns and cities.

Environmental Sustainability Measures

National Restaurant Association of India (NRAI) underscores the need for a reduction in GST on eco-friendly packaging materials, aligning with the government's environmental objectives. This move encourages sustainable practices within the industry and supports the shift away from higher-taxed materials like plastic.

Beyond Tax: A Multi-Course Menu of Requests

NRAI's wishlist extends beyond just tax concerns. The association seeks various other reforms, including:

• Industry status: To unlock easier financing and subsidies for restaurants.

• Balanced e-commerce policy: To protect restaurants from unfair competition from online platforms.

• Reduced GST on commercial rentals: To ease operational costs.

• Simplified licensing processes: To remove bureaucratic hurdles for new entrants.

• Extended business hours: To boost economic activity and cater to changing consumer habits.

• Targeted subsidy schemes and easier access to debt financing for SMEs: To empower smaller restaurants, particularly in non-metropolitan areas.

• Reduced GST on eco-friendly packaging materials: To promote sustainability and align with the government's environmental initiatives.

A Call to Action: Shaping a Vibrant Future for Indian Restaurants

NRAI's comprehensive set of proposals reflects the aspirations of India's thriving restaurant industry. By implementing these reforms, the government can help level the playing field, nurture growth, and unlock the industry's full potential, serving up a win-win for both restaurateurs and the Indian economy as a whole