National Restaurant Association of India (NRAI) is planning to take a legal action against the Kerala government’s decision to implement fat tax as it believes that fat tax is a crap and it is not a well researched move.
NRAI President Riyaaz Amlani said, “Fat tax is crap tax. It is not a well researched move. This is a discriminatory tax without application of mind and NRAI is fighting it we will not let it come into passing.”
He added, “If there is a real logic behind it, we would have welcomed it but as everybody knows India lives a very carb-rich lifestyle and that way of eating should be changed through education. People living in non-metros in India eat out less than two times a month. So, if you have 90 meals a month and eat out only twice, then please explain how can you get fat?”
He further added, “It is not about what you are eating, it is about your entire lifestyle. So, just by taxing something is not going to resolve the problem. Countries which have had implemented this tax had to take it back as it was ineffective.”
The CPI(M)-led LDF government in Kerala had proposed a slew of new tax proposals, including five per cent tax on certain packed foods and a ‘fat tax’ of 14.5 per cent for burgers, pizzas and pastas served in branded restaurants.
The proposed ‘fat tax’ of 14.5 per cent for burgers, pizzas and pastas served in branded restaurants would target an additional revenue of Rs 10 crore, Kerala finance minister Thomas Isaac had said.
However, Industry chamber CII has asked the Kerala government to review imposition of 14.5 per cent tax on burgers and pizzas as it would adversely affect quick service restaurants in the state.
Licensing v/s Registration
When questioned about the complexities of licensing, Amlani said, “ NRAI is trying to ease out the process. They have proposed that licensing should be replace by registration. Any restaurateur who waits for the licenses for the operations on an average occurs a loss of Rs 1 lakh per day as there are various costs involved like the heavy-duty rentals, staff and a many more.”
Riyaaz Amlani said the NRAI is also looking forward to the Government to constitute a single central body for the restaurant industry to solve all the operational issues. He said, “FSSAI is good central body and we are happy to work with FSSAI on what they want provided they take inputs from NRAI before formulating any policy. Conversations are always on with FSSAI. It is a body that is always willing to listen.”
He further added, “Our problem is the same topics are covered by health licensing and FSSAI. So, we go to FSSAI to get health license and then again go to the local municipal body to get the same license and sometimes, these two things are directly conflicting. We are trying to get rid of the complexities and we are very happy to work with one central body because if we have a chain of restaurants then every city has different rules for operation. So, if there is a central body, we will be very happy to comply with the rules.
NRAI has recently released India Food Services Report 2016 which states that while the food services industry has seen a steady growth over the last three years, the report reveals that the industry has its fair share of roadblocks and challenges like high real estate and manpower costs, inadequate supply chain, infrastructure, financing issues and majorly policy formulation. The main aim of the report is to aid entrepreneurs and investors take informed decisions and unite the industry under one banner.
NRAI India Food Services Report 2016 estimates that the total contribution of the restaurant industry alone will contribute 2.1 per cent to the GDP of India by the year 2021.
The total food services market today stands at Rs 3,09,110 crore and has grown at 7.7 per cent since 2013. This is projected to grow to Rs 4,98,130 crore at a CAGR of 10 per cent by 2021. This year alone, the Indian restaurant sector will create direct employment for 5.8 million people and contribute a whopping Rs 22,400 crore by way of taxes to the Indian economy.