Budget 2024 Wishlist: Food Industry Calls For Tax Credit Restoration
As Finance Minister Nirmala Sitharaman is gearing up to unveil the Union Budget 2024 on 1 February, all sectors have articulated their expectations from the government. The upcoming budget presentation, being a vote-on-account, is anticipated to have minimal announcements since the comprehensive budget will be presented post-election by the new government. Nevertheless, the food and hospitality sector has stood united, appealing to the government for the restoration of input tax credit for GST, citing the escalating costs faced by the industry.
Zorawar Kalra, Founder and Managing Director, Massive Restaurants, appealed to the government for the restoration of input tax credit for GST, citing the escalating costs faced by the industry. With rents, construction, and procurement expenses soaring, the industry faced substantial challenges in recovering these costs. Zorawar emphasised the restaurant industry's role as the second-highest employer in the country and stressed that restoring input tax credit would be a lifeline for survival and growth.
Westlife Foodworld's Chairperson, Amit Jatia, joined the chorus of concerns. He said, "One critical aspect we are keenly watching is the existing GST structure, particularly concerning input tax credit. The current 5 per cent GST rate on restaurants, bereft of the input tax credit, presents a potential hurdle, especially in capital expenditure where input tax credit is not available. We propose a nuanced approach – offering restaurants the choice between a 5 per cent GST rate and a rate that includes input tax credit. This, we believe, would be mutually beneficial for the government and the industry, fostering a more conducive growth environment."
He further added, "we advocate for policies supporting the comprehensive growth of the restaurant industry. This includes measures to fortify the agriculture sector and enhance the supply chain infrastructure, especially pertaining to freezers. We acknowledge the government's past decisions favoring agriculture and allied sectors and look forward to continued support.
The founder of Gawky Goose, Kiran Kumar HV, stood at the forefront, advocating for measures that would invigorate the culinary landscape of the nation.
In a passionate statement, Kiran Kumar highlighted the potential of the hospitality sector, emphasizing its role in the economic revival of the country. With a projected contribution of $1,504 billion to India's GDP by 2047, the sector's significance was undeniable. Kiran Kumar's focus was not just on the financial aspects but on fostering diversity and healthy competition within the industry.
The call for simplifying FSSAI licensing and regulations for independent restaurants echoed Kiran Kumar's vision of empowering local entrepreneurs. He believed that streamlining processes and addressing long-standing issues like inadequate tax credits could pave the way for a more accessible market and a richer dining experience for consumers.
Gagan Anand, Founder and Director, Scuzo Ice ‘O’ Magic, brought attention to the inequity of the current tax structure. He also highlighted the burden imposed by a 5 per cent GST without availing the Input Tax Credit, leaving both businesses and patrons to bear the full cost. Gagan Anand's plea was for a more balanced approach, urging the government to consider extending ITC benefits against the 5 per cent GST. He envisioned a symbiotic relationship between the hospitality sector and the taxation system, fostering growth and prosperity for all.
