Restaurant sector seeks re-introduction of input tax credit, says NRAI

The restaurant sector is seeking re-introduction of input tax credit from the government in addition to reduction in number of licences required for operating a restaurant, the National Restaurant Association of India (NRAI) said today.

"The restaurant industry has been singled out by removal of the input tax credit. The very concept of ITC is central to and is in fact the raison dtre of GST, which is to prevent cascading of taxes," NRAI President Rahul Singh said in a statement.

There are three B2B service industries closely linked with restaurant industry, which are banking, insurance and real estate which post GST have been allowed ITC on any supply of goods including capital goods, he added.

"We would urge government of India to re-introduce ITC for restaurants," Singh said.

Highlighting the plight of the sector, Singh said: "It takes over two dozen licences and permissions to be able to serve a sandwich. Rather than serving our customers, most of our time is spent in running around departments."

The restaurant industry is worth Rs 3.52 trillion (Rs 3,52,000 crore) and is expected to grow to Rs 5.52 trillion (Rs 5,52,000 crore) by 2022, he claimed.

"For an industry of this size generating over eight million jobs, we also request introduction of a uniform policy that includes single window clearance and reduction in number of licenses required for operating a restaurant," Singh said.