Priyank Sukhija, who owns restaurants like Lord of the Drinks and Warehouse Cafe in Connaught Place, claimed the New Delhi Municipal Council (NDMC) action led to a 40 percent decline in business of restaurants in the area. “There was a time when CP was becoming a hub for restaurants but now no new restaurants are coming up here. The crowd is there but restaurateurs do not want to venture into CP,” he said. “I had to sack 150 people across six of my restaurants in CP after the rooftops were closed by NDMC. We have given stability certificates to NDMC but we have been bearing the brunt since a portion of a building in C block, above Jain Book Depot, caved in,” he added. Like Connaught Place, restaurants in Khan Market also bore the brunt of sealing.
Business of restaurants in Hauz Khas Village was also hit by sealing of rooftop operations, multiple raids, parking issues, lack of fire safety measures and traffic congestion. The government’s decision to scrap ITC in November 2017 dealt another blow to the sector. It was accompanied by a cut in Goods and Services Tax (GST) from 18 to 5 per cent for restaurants. Owner of QBA, a resto-bar in Connaught Place, Atul Kapur, said, reintroduction of ITC is one of the central issues for restaurateurs. “Unlike other businesses, we pay GST but do not get input tax credit, which pushes our costs higher. The issue has been taken up with the government but nothing has been done yet,” he said. Sukhija echoed similar sentiments.
“Even five-star hotels are getting input tax credit but we are not getting it. I am putting my money through cheques, which means I am at a loss, while those who are functioning entirely through cash are safe. We have made numerous appeals to the GST Council but our appeals have fallen on deaf ears,” he said. Before the introduction of GST, those buying goods for their businesses had to pay input tax and they were also supposed to pay output tax while selling them. The ITC mechanism was introduced to avoid double tax payment. Under the mechanism, the tax paid on input was deducted from the tax payable on output. President of the National Restaurant Association of India, Rahul Singh, said there should be two GST slabs. “Restaurants should have the option of choosing from two GST slabs the present five per cent without ITC or 12 per cent with ITC. If the option of two slabs is not possible, then ITC should at least be permitted on rent. Liquor should be brought under the ambit of GST and not doing so defeats the very purpose of bringing in a uniform single (tax) structure,” he said. Restaurant owners also want a clear and fixed policy for governing the sector.
