India's restaurant sector has potential to provide 1.5 cr jobs by 2028 given 'right impetus':NRAI

New Delhi: India's restaurant sector has the potential to provide employment to 1.5 crore people by 2028, from 85 lakh at present, provided it gets the "right impetus" from the government including an 'industry' status and benefit of input tax credit on GST, National Restaurant Association of India's (NRAI) Vice President Zorawar Kalra said on Wednesday.

The NRAI claims to represent 5 lakh restaurants across the country. The association has been at loggerheads with food delivery aggregators like Swiggy and Zomato primarily over the aggregators' foray into the quick-commerce space with their own private-label brands, arguing this move undermines fair competition and harms independent restaurants.

"We don't have a separate industry status, that would be a big positive move, as it would give us a voice," Kalra told PTI.

The NRAI Vice President, who is also the Founder and Managing Director of Massive Restaurants Pvt. Ltd, described the lack of input tax credit on GST as a "major issue" faced by the country's restaurant industry, expressing hope that the issue will be taken up as the Association was in talks with the "right people".

Under the prevailing Goods and Services Tax (GST) framework, restaurants fall under the 5 per cent GST rate, with no option to claim input tax credit (ITC) or the 18 per cent GST rate, with ITC claims.

The Delhi High Court has set May 9 as the date to hear pleas of restaurant bodies including the NRAI and Federation of Hotel and Restaurant Associations of India challenging an order against the mandatory levying of service charge on food bills.

Asked about the service charge issue, Kalra refrained from commenting saying the matter was subjudice.

He, however, argued that the service charge levy was a globally "accepted norm" and it is "fully optional".

"So if you're unhappy with somebody's service, you can choose to remove it. So that was always the case. It was never forced, it was never mandatory, it was always optional," the NRAI Vice President said.

Kalra emphasised that there has to be more dialogue between the industry and the aggregators.

"The aggregators' are doing some moves that are beneficial for the industry, and sometimes some moves happen that are perhaps not in the best interest of the industry, or, you know, all members of the of the equation, all aspects of the equation. So I think there's more dialogue required. They have to understand the trials and tribulations of the industry".

He further expressed hope that the issues with the aggregators' will be resolved in an amicable manner that helps the restaurant industry, arguing that the industry is the one that is feeding the platforms.

Kalra said provided the restaurant industry get the right tools and resources to grow including an 'industry' status, provision of ITC on GST, and resolution of issues with the food delivery aggregators and the service charge levy, it can provide jobs to 1.5 crore people by 2028.

"... It also means that the employment, which is currently at 85 lakh, will go up to, in my opinion, if all of this happens, will be 50 per cent higher by 2028, than what we are predicting currently. Currently, it's predicted to be 1 crore. I think it'll be 1.5 crore," the NRAI Vice President said.