The restaurant industry has written to the Maharashtra government, seeking immediate rollback of the 15% increase in excise licence fee for the financial year 2022-23, noting that the increase in the fee could not have come “at a worse time”.
The state government has hiked licence fees for the sector by almost 15% for the new financial year.
The letter, written by the Mumbai chapter of the National Restaurant Association of India (NRAI) on Saturday, is addressed to the excise minister in the Maharashtra government. ET has reviewed a copy of the letter. “With two years of lockdown, three waves of pandemic, limited operations, restrictions on capacity and timing, there could not have been a worse time to bring an upward revision in the license fee,” the letter, signed by NRAI Mumbai Chapter head Pranav Rungta, states.
“Increasing excise license fee by 15% after imposing all possible restrictions for two years, keeping us shut, to operate at 50% capacity, for restricted hours and serve only to fully vaccinated is illogical and harsh,” Indigo Hospitality founder Anurag Katriar said in a tweet.
In addition to a rollback request of the 15% fee hike for licences, the NRAI has also written to the government to be allowed to pay the license fee quarterly, instead of yearly. “This will allow us some liquidity support to enable us to pay salaries and rent on time,” the letter adds.
The industry body has also asked to be charged the license fees on a pro rata basis, to capacity restriction and timings under which it is allowed to operate.
The letter cites that the industry “is not in a position to bear any additional increase in fees under the existing circumstances”.
Restaurant businesses pay excise licensing fees to states depending on the individual state policy, which is collected annually by the states. The industry also pays 18-28% GST. Maharashtra is one of the very few states to have hiked annual excise fee so far, another industry executive said,
Pandemic-induced restrictions in Maharashtra have included complete shutdowns, restricted use of capacity and limited operating hours. According to an industry estimate, more than 25% of the sector has shut down permanently leading to loss of jobs for 25 lakh workers since the outbreak of Covid-19.
“If the Government doesn’t lend an immediate helping hand to the industry, these numbers will worsen further very soon,” the letter added.
The industry has also sought a series of measures from the centre such as tax holidays, a separate ministry for the hospitality sector, standardised restrictions within states and relief on GST payments. In the third quarter, various restaurants had reached 80-85% of pre-Covid sales. However, the onset of the Omicron which led to fresh round of restrictions, again led to massive decline in sales.