NRAI delegation meets FM Nirmala Sitharaman, seeks a mix of policy and liquidity support for F&B sector

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A four-member delegation of the National Restaurant Association of India (NRAI) had a virtual meeting with the Finance Minister on Thursday to discuss urgent industry-specific issues. This was in the context of the hospitality sector not receiving any specific relief in the economic stimulus package.

The delegation spoke about the core issues impacting the sector due to COVID-induced lockdown. All these issues were largely around policy and liquidity support; none of the suggested measures expected to put any major strain on the exchequer. The key issues discussed were as follows:

Employment support: Request for unemployment pay support for lower-end employees through ESIC corpus. Out of approximately 3.20 crores beneficiaries of the ESIC scheme, over 50 lakh belong to the hospitality sector. (Policy cum liquidity support)

Working capital support: Request was made to make available urgent working Capital support at the lowest possible interest, as close to the repo rates, with a six-month moratorium for the restaurant industry. (Liquidity support)

Force Majeure towards rent: It was expressed that the current pandemic is one of the worst human crisis ever, and the event should, therefore, be declared as force majeure. This is similar to the invocation of force majeure made in the real estate sector. (Policy cum liquidity support)

E-Commerce support: The delegation apprised the Minister and the officers that how these modern-day digital landlords are hurting the interests of lakhs of small and large entrepreneurs in the sector. It was requested that an immediate clarification bringing them under the ambit of Press Note-2 of the Commerce Ministry of December-2018. A proposal to regulate and cap platform-led discount & commission was also made (Policy support)

GST: Request for allowing an option to avail Input Tax Credit (ITC) on GST for the restaurant industry was repeated again. The proposal was made to have dual rates, current 5% for those not availing ITC, and 12% for those availing ITC. (Policy support)

Refund of pending income tax dues: Request was made to expedite the refund for all pending tax claims at the earliest. (Liquidity support)

Speaking about the meeting, Anurag Katriar, President of NRAI; CEO & Executive Director of deGustibus Hospitality Pvt. Ltd. said in a statement, “It is a testimony of the FM’s serious intent that she was accompanied by two key senior secretary-level officials of the ministry in the meeting.

We conveyed to them that we are fighting a grim battle for our existence and we will need urgent policy and liquidity support from the government to survive this phase. We informed them that if we fail to do so, it may lead to massive job losses in the sector. Each issue was discussed in detail and she has promised to look into all of these issues at the earliest.” Apart from the Minister, the meeting was also attended by the Secretary-Economic Affairs Department and the Revenue Secretary.

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