Budget 2024: The National Restaurant Association of India (NRAI) has embarked on a mission for substantial reforms, aiming to reshape the contours of the countrys restaurant industry. In a missive addressed to Finance Minister Nirmala Sitharaman, as the Union Budget looms, the NRAI is championing key changes, with a vision to invigorate the sector and foster growth.Budget 2024: Restoration of input tax credit for GSTIn a groundbreaking move, the NRAI advocates for the restoration of the input tax credit for Goods and Service Tax (GST). Presently, restaurants operate under a 5% GST rate without the advantages of input tax credit. The association contends that reintroducing this credit will establish a level playing field. To offset the impact, a proposed increase in the GST rate to 12% has been suggested.Kabir Suri, President of NRAI and Co-founder/Director of Azure Hospitality Pvt Ltd, affirms, While restaurants below a certain revenue threshold can continue with the current GST provisions, the organised sector with higher revenues and capex outlay may move towards the proposed GST regime, as reported by Mint.Budget 2024: Creation of a dedicated Food Services MinistryA pivotal proposal from the NRAI is the establishment of a dedicated food services ministry or department. Justified by the industrys substantial annual contribution of approximately ₹4.23 trillion to the economy, this dedicated body aims to streamline the currently fragmented regulatory framework. By simplifying compliance, the association envisions significant growth opportunities for the sector.Budget 2024: Additional demands for enhancing the industry The NRAIs visionary proposals extend beyond tax reforms. The association is pushing for the grant of industry status to facilitate easier financing and subsidies. Addressing the challenges faced by the sector in the digital realm, the NRAI seeks a balanced e-commerce policy to shield restaurants from unfair competition. Operational hurdles, including the reduction of GST on commercial rentals and the simplification of licensing processes, are also highlighted.Budget 2024: Extended business hours, subsidy schemesAdvocating for extended business hours, the NRAI believes this initiative can propel India towards its ambitious goal of becoming a $5 trillion economy. Targeted subsidy schemes and improved access to debt financing for Small and Medium Enterprises (SMEs), especially in smaller towns and cities, are among the NRAIs recommendations to stimulate economic growth.Budget 2024: GST Reduction on eco-friendly packagingAligning with the governments environmental objectives, the NRAI emphasises the need for a reduction in GST on eco-friendly packaging materials. This strategic shift away from higher-taxed materials, such as plastic, reflects the industrys commitment to sustainable practices and environmental stewardship.As the NRAI leads the charge for these transformative reforms, the stage is set for a potential revitalisation of Indias restaurant industry. These proposals, if implemented, have the potential to redefine the sectors landscape, drive economic growth and foster a sustainable and thriving environment for restaurants across the country. The industry and investors await the Union Budget with anticipation, hoping for a new era of prosperity and innovation.
