As we move closer to the much awaited budget for 2024, the hospitality industry is expecting some major shifts in policies and financial aids that will help in its growth.
Addressing the GST incongruity is paramount for fostering equitable growth within the hospitality sector and the sector is eagerly waiting for the same as the year looks promising for the industry. “We strongly urge for parity in GST rates between standalone restaurants (5%) and hotel restaurants (18%), recognizing that this disparity adversely impacts our industry. A harmonized tax structure will undeniably contribute to a more resilient and competitive landscape within the hospitality and tourism sectors,” said Tejus Jose, Director of Operations, ibis and ibis Styles India.
The sector not only look for a budget that not only acknowledges the significance of the hospitality industry in bolstering India's global appeal but also takes concrete steps to create a conducive environment for sustainable growth and competition.
Sharing his on the same, Vishal Anand, Founder, Moonshine Food Ventures addressed the need for scaling tourism to new heights. “The expectations from the upcoming budget are there as they have been for over the years. Especially for the F&B sector. With an increased focus on scaling tourism to new heights, there is an expectation for allowances, subsidies & steps to push the F&B sector as well,” he further added.
"Lifestyle health problems in India are increasing and unhealthy food is a major contributor to this issue. The government needs to take cognizance of the problem soon and put in place solutions so that long term effects of such unhealthy foods can be contained.
Healthy foods and beverage options are available, however, 74% of people in India find it unaffordable, as per the ‘State of Food Security and Nutrition in the World’ (SOFI) 2023 report by UN. Sufficient tax breaks and financial incentives for healthy foods and beverages as well as boost in spending towards awareness of healthy eating will go a long way in solving this problem,” commented Abhishek Sarwate, CEO, Utopian Smoothies.
Not only this, in the dawn of the new financial year, the hospitality (specially QSR) sector stands resilient, yet burdened by the inequity of the current TAX structure and hence brands and businesses are expecting a low GST rate.
“The imposition of a 5% GST without availing the Input Tax Credit (ITC) deprives our industry of rightful benefits, resulting in a scenario where both businesses and patrons bear the brunt of the full cost. From raw material to the end product and fixed expenses like rental, utility etc. the hospitality sector diligently pays an 18% GST without reaping the advantages of ITC. As we embark on this fiscal journey, we call upon the government to consider extending ITC benefits against the 5% GST,” pointed Gagan Anand, Founder and Director, Scuzo Ice ‘O’ Magic, India’s first Live popsicle concept and dessert café.
The experts also believed that this thoughtful adjustment will not only alleviate the financial strain on the industry but also empower businesses to provide enhanced services and experiences. Let this new financial year herald a fair and symbiotic relationship between the hospitality sector and the taxation system, fostering growth and prosperity for all, they shared.
Commenting on the same, Vikrant Batra of Dhansoo Café mentioned, “Restaurant industry is one of the most significant contributors to the national economy and one of the highest employment creators in India. The key request that we want to highlight in this budget is the need for reinstating the Input Tax Credit (ITC) under the Goods and Services Tax (GST) for the restaurant industry. The sector is currently subjected to a 5% GST rate without the benefit of ITC, and if this can be certainly looked upon, it will be of great help.”
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