NRAI urges government to rationalize GST rates for restaurants
The National Restaurant Association of India (NRAI) is urging the government for the rationalization of GST rates for restaurants, saying current taxes on essentials like rent and marketing are causing significant financial strain.
In a recent letter to Finance Minister Nirmala Sitharaman, NRAI pointed out that these big expenses don't qualify for Input Tax Credit (ITC), so restaurants end up paying more out of pocket.
NRAI believes updating these rates is key
NRAI President Sagar Daryani noted in the letter that restaurants face an 18% GST on rented spaces and also on commissions paid to food delivery apps—which contribute up to 40% of revenues for many restaurants.
The group is also asking for lower GST on basics like condensed milk and soya milk drinks.
Right now, many standalone restaurants pay 5% GST with no ITC benefit at all.
The NRAI believes updating these rates is key if India's food service sector is going to keep growing in the coming years.