National Anti-Profiteering Authority (NAA) has rejected a complaint against a Subway franchisee, saying that the increase in the base price of its products was commensurate with removal of input tax credit (ITC) benefits.
The GST Council had lowered the tax rates on restaurants to 5% from 18%, except those located within hotels with room tariffs of Rs 7,500 and more, effective November 15. In February 2018, the government also withdrew input tax credit where 5% GST was applicable.
NAA, in its order, stated that a franchisee of Subway India, NP Foods, had raised the base price of products to make good the loss which had occurred due to denial of ITC post GST rate reduction.
A consumer had filed a complaint against the franchisee alleging that the restaurant had raised the base price of one of its offerings to Rs 145 from Rs 130 after the reduction of the tax rate by the GST Council.
Abhishek Jain, Partner at EY, said, "This ruling comes as quite a welcome measure for the restaurant industry in specific, which had offset the increased costs on account of disallowance of input tax credit with the reduced tax rate."
Abhishek A Rastogi, Partner at Khaitan & Co, said, "The whole dispute in the days ahead would circumvent the phrase ‘commensurate reduction of prices’ and, hence, it is imperative that the procedural mechanism to arithmetically calculate the price reduction is provided."
Subway, one of the world's largest restaurant brands, announced its 10th consecutive quarter of positive sales, as it continues to execute against its multi-year transformation journey.
During the second quarter, Subway broke brand records as it achieved its highest average unit volume (AUV) in North America for three consecutive months and, within that time, its highest weekly AUV in the company's recorded history.
For the first half of 2023, Subway saw positive traffic across North America and significant growth in global restaurant same-store sales.
Positive sales momentum continues to be driven by menu innovation, modernization of restaurants and ongoing improvements to the overall guest experience, including digital.
The brand saw 9.8% increase in same-store sales and 11.1% increase in digital sales as compared to the last year.
"Over the past two years, we've made consistent progress across all areas of our business, driving impressive sales results and positive changes for our franchisees and guests," said John Chidsey, Subway CEO.
Subway continues to see significant growth in its digital channels, which have more than quadrupled since 2019. Later this year, guests can expect new digital enhancements in key markets around the world, including a refreshed loyalty program.
Internationally, Subway announced its 15th new master franchise agreement, as it continues to strategically expand its global footprint with established, well-resourced operators with market-specific expertise.
In July, Subway kicked off the third phase of its transformation journey with the arrival of freshly sliced meats in U.S. restaurants – an $80 million investment across 20,000 restaurants – and the launch of Deli Heroes, a collection of the ultimate deli subs.
QSR chain Subway® has introduced a new version of its flagship ‘Sub of the Day’ (SOTD) value offer across its restaurants in India.
Guests at Subway® will now be able to enjoy the brand’s most popular and scrumptious sandwiches at discounted prices starting at just Rs 145.
Also Read: Restaurants Unlock 2020
To promote the SOTD offer, Subway® India has rolled out a promotional film across its social media accounts.
“We wanted to do something special for our loyal guests who we would love to see back in the restaurants. Sub of the day remains our most successful offering till date and hopefully with this exciting mix of new sandwiches, it would encourage guests to walk in to try them out,” shared Shuchi Monga, Head of Marketing, Subway®-South Asia.
The campaign film is a quirky animated take on the reactions people have when they find their favourite subs featured in the offer. The upbeat music makes the celebratory feeling more pronounced and the visual treatment given is akin to that of strip comic books. The campaign is now live and is running across all digital platforms.
Link to YouTube: https://www.youtube.com/watch?v=9sGfGK01D0I&feature=youtu.be
The new 2020 SOTD menu offers Veg Shammi and Tuna Subs every Monday and Thursday, Chatpata Chana and Chicken Slice, every Tuesday and Friday, Corn & Peas and Chicken Kofta, every Wednesday and Saturday Tandoori Tofu and Chicken Teriyaki, every Sunday.
May Interest: Subway reopens outlet at Bengaluru airport with ‘Fresh Forward’ design
During the recently concluded Indian Premier League (IPL), Subway® India had also introduced ‘Buy two get one free’ limited time offer for guests on order, dine-in or takeaways, at participating restaurants.
RI Bureau
A Subway restaurant operating out of Kempegowda International Airport, Bengaluru (KIAB) has emerged as the chain’s highest selling outlet in terms of number of units sold, amongst all Subway restaurants situated in non-traditional locations, across the globe. “It’s been truly gratifying to see the response to Subway. Local residents and visitors to the airport appreciate that our submarine sandwiches provide a filling and tasty meal.” He added, “We serve a wide range of vegetarian options and Indian flavours, as well as the classic international sandwiches that appeal to both domestic and international travellers,” shared Griffith David, the franchise owner of this outlet. Subway which is celebrating its 50th anniversary this month is the world’s largest sandwich restaurant chain with over 44,188 restaurants in 110 countries.
It also has restaurants operating in non-traditional locations which include hospitals, malls, airports, highways etc. Commenting on the same, Manpreet Gulri, Country Head, Subway Systems India Private Limited, said, “Non-traditional locations offer great flexibility in terms of hours of operation and can give good return-on-investment. Club this with a keen entrepreneur and a dedicated staff and you have what Griffith has accomplished here. Non-traditional locations have been a large contributor to Subway’s positive growth in India.” This milestone also highlights a growing number of customers who consciously choose to eat fresh, even when in transit. Given the number of people visiting airports, these often become unofficial rendezvous points for families and friends, who might like to eat while they await their flights or meet their relations.
“Subway provides visitors including passengers and flight crews a great meal option which is easily portable too. As an entrepreneur, I believe that Subway’s promising business model, the regular training and back-end support provided to its franchisees and its globally appealing menu make it a great brand to be associated with,” added David.
Opened in 2008 the restaurant has separate counters -- two each, catering to vegetarian and non-vegetarian consumer preferences. This is in line with Subway’s global policy to respect cultural preferences and sensitivities of respective markets.
Subway India currently operates 531 restaurants in over 70 cities and has a customer universe that includes all age-groups. The sandwich chain has a strong presence in all the major Indian metros and plans to expand its footprint through an aggressive growth strategy.
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