Maharashtra government had earlier in March announced a hike of 15 per cent on the renewal of excise licence for the year 2020-21. This was opposed by all trade bodies in food service sector and a request was made to roll it back considering the precarious situation of the business in the wake of lockdown necessitated by Covid-19. This was regretfully not accepted by the government and no relief was offered to the beleaguered industry in this regard.
In its latest circular dated April 13, 2020, the Maharashtra State Excise Department has now offered not to charge the increment of 15 per cent if the payment is made on or before April 30, 2020. This amounts to coaxing everyone to pay the fee in advance at a time when the business is shut under the government order and may effectively not open at least till the end of first quarter of this financial year. Any failure to do so will effectively mean paying a premium of 15 per cent at a time when the business sentiment is at its lowest ebb ever and the industry is seeking urgent relief from both Union and the state government for its mere survival. It may also be noted that the cash-strapped sector is already reeling under the pressure of ensuring the well-being of its employees during the shutdown and somehow preventing the immediate specter of massive job losses in the sector by deploying all its resources towards human needs.
All three major trade bodies of F&B, i.e., The Hotel and Restaurant Association of Western India (HRAWI), the National Restaurant Association of India (NRAI) and the Indian Hotel and Restaurant Association (AHAR) firmly believe that the move by the government is equivalent to penalising a business for non-timely payment of a fee during the worst crisis that mankind has ever faced in last hundred years. There is zero cash flow during the lockdown as the industry stands firmly with the nation in its fight against the global pandemic, the Covid-19.
“The industry is completely shut, there is no business and we have no income; and it could be a long time in future before business gets back to normal. We appeal to the state as well as the Central governments to understand our situation. It is not the time for half measures or 15 per cent cuts, but suspension of all statutory fees. The government should proactively take measures to boost business as the hospitality and tourism sector is one of the biggest job generator and contributor to India's GDP. This notice has come as a shock to us. The governments at the Centre as well as the state have acknowledged the plight of the hospitality industry. We have thrown open our restaurant and hotel kitchens to prepare meals for the needy and are providing close to one lakh meals per day. Besides this, our rooms have been thrown open to house doctors and medical workers. Our industry was the first to get hit due to the pandemic and business has come to a complete standstill. In such a situation, instead of lending support, they are expecting us continue paying statutory levies as before. This will break our backs,” says Gurbaxish Singh Kohli, president, HRAWI.
In a letter addressed to Chief Minister of Maharashtra Uddhav Thackeray, the associations have appealed for:
1. Roll back of the 15 per cent hike in the licence fee and give a reduction of the fees in these times of dire stress for the industry.
2. Pro rata reduction in licence fees charged owing to lockdown and consequent dry days as a measure of support to the hotel and restaurant Industry.
3. Withdrawal of the latest circular dated April 13, 2020, as well as of expectation from hotels and restaurants to pay any fees under present situation whereby lockdown is extended.
4. Not to put conditions to the reliefs granted on deferment of renewal date of staff payments or otherwise.
“In his address to the nation yesterday, the PM appealed to everyone to show compassion during these trying times. We are doing our bit as well, having distributed over one and a half million meals in last two week. In light of this appeal, I must say that decision to hike excise fee at this juncture is totally against the spirit of compassion and defies logic. We are currently shut for business for almost a month and there is no concrete date of resumption in the visible horizon either. Yet, the Excise department’s insistence to pay the liquor licence fee in advance for the full year now or pay 15 per cent more is very unfortunate. As an Industry, we are seeking concessions from every government and every department to ensure our mere survival and at such a time, proposal to hike the licence fee is nothing less than shocking. With our meagre resources, we are prioritising the human needs of our employees and trying to ensure that the kitchen fires of our employees are kept burning; paying licence fee for next year cannot become our bigger priority. I appeal to the government to rescind this decision and allow us to pay pro-rated fee for next year in easy installments,” adds Anurag Katriar, president, NRAI.
The hotels and restaurants in the city have been at the forefront in providing assistance to the government during this pandemic. Hotels kept their doors open to stranded tourists as well as to potential Covid-19 patients. The industry took several measures supporting the government in its fight against the pandemic.
“The industry was already going through the recessionary phase from January and the pandemic was the last nail in the coffin. An industry in such trying times wants to see that each member is able to restart the business. The challenges faced by a small and medium sized restaurant are huge as, on one hand, he is facing a huge manpower shortage and, on the other, loss of business due to the lockdown. Moreover, payment of salaries, general maintenance and requirements of working capital have further created a hole in his pocket. For that we need assistance from the government in terms of relief in payment facilities for licence fees and reduction in respect to the number of days lost due to the lockdown. This would stimulate the industry and maintain employment and help the government through taxes which will directly help in nation building,” concludes Shivanand Shetty, president, AHAR.