Restaurants demand rationalization on GST, safety-net for workers in budget 2021

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The finance minister has quite a few things on their table, ranging from increasing the pace of digitization, lower GST rate, stimulus package for the sector.
  • Nusra Deputy Features Editor
Restaurant

Covid-19 pandemic has changed the whole flavor of restaurant and hospitality sector.  They have gone through a sea change when it comes to their business innovation, change in concepts/ models etc. Therefore, the industry is expecting a little more with the budget 2021 that is scheduled to be announced early February.

The finance minister has quite a few things on their table, ranging from increasing the pace of digitization, lower GST rate, stimulus package for the sector. Ahead of Union Budget 2021, members of the food and beverage industry have expected a lot from the current budget.

Rationalizing GST: ''The F&B industry is one of the many industries that has been hit badly by the ongoing coronavirus pandemic. With the 2021 budget, our hope is that the government will rationalize GST and allow restaurants to take input on their purchases,” shared Kasinn Khaowprasert, Director, Krua Thai- restaurant by CP Avant Pvt Ltd. While the food Industry had been thriving over the past decade, with the Corona Virus led slow down it is going to be difficult for them to overcome challenges like loss recovery and preference for ordering food online. Food and hospitality businesses have been forced to make tough choices in light of the global epidemic, such as temporary cessations of F&B practices to comply with travel bans and social distance requirements, and the consequence just doesn't stop there.

Also Read: Here are 4 Top Expectations by F&B Sector from Budget 2020

Increasing pace of digitization: "With the entire tea industry looking to pivot online in a post-pandemic world, the government should focus on increasing the pace of digitisation in semi-urban, non-urban or Tier 2 & 3 cities across the country by a faster roll-out of 5G services this year,” added Kausshal Dugarr - Founder and CEO of Teabox who believed that with this direct-to-consumer companies like his gain faster access to these untapped markets, expand the distribution channels and build on customer base. This, of course will be possible if backed by initiatives to revive demand in the country by boosting job creation opportunities and accelerate growth of manufacturing and industrial activities. A reduction in personal income tax should help put more money in consumers' hands and improve overall consumer sentiment.

Creating safety-net for workers: "This year we expect the smaller things to be fulfilled in the budget. Firstly an official acknowledgement that F&B is an industry with the largest workforce. So, creation of a safety net for its workers and staff like subsidized health insurances and other scheme,” pointed Dharmesh Karmokar, Director at Thangabali & Esora by adding that some older requests from the sectors side include single window clearance for all permissions, uniform rules across states, extended operating hours, Input tax credit.

Stimulus package for the sector: "The year 2020 has been a tough one for all the industries and especially for the F&B sector; many enterprises observed a complete shutdown or were forced to downsize. According to me, a dedicated stimulus package in the Budget for the sector, predominantly targeted to individual restaurant owners would definitely help. Further, the government should also focus on easing access to credit for small and medium businesses,” said Sneh Jain - Co-founder and Managing Director, The Baker's Dozen.

May Interest: Food delivery sector demands to rationalize GST to 5% from 18%

Also, from a bakery industry point of view and looking at the current scenario, the bakery establishments cannot claim a complete input tax credit. While this led to the increase in the price pre-Covid, with increased costs of hygiene and manufacturing due to strict adherence to protocols, there is an urgent need to reinstate 100% input tax credit for the sector. 

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