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The National Restaurant Association of India (NRAI) has made a representation to the Kerala government to review its decision of levying fat tax on products such as burger, pizzas and pasta sold through branded restaurants. With fears of other States looking to replicate a similar tax, the NRAI officials said they may look at legal options.
Samir Kuckreja, Past-President and Trustee, NRAI, told BusinessLine , “We have already made a representation to the Kerala Finance Minister and a delegation has sought a meeting with the authorities. In our representation, we have said that there is no rationale behind such a tax. It is the choice of the consumers and putting an additional tax will not act as a deterrent. The consumers should have the choice and should be allowed to make their own decisions”.
Asked if the association will look at legal options, “We have first made a representation. However, if nothing happens we will explore legal options.” Already reports have indicated that Gujarat may consider putting a similar fat tax on junk food.
Meanwhile, the NRAI, which released the India Food Services Report 2016, said that the Indian food services industry is projected to grow to ₹4.98 lakh crore at a CAGR of 10 per cent by 2021. The report was compiled by Technopak. Riyaaz Amlani, President, NRAI, said, the total food services market is pegged at ₹3.09 lakh crore currently. “This year alone, the Indian restaurant sector will create direct employment for 5.8 million people and contribute a whopping ₹22,400 crore by way of taxes to the economy,” he said.
However, the unorganised market still dominates the food services industry with 67-per cent share. The organised market which includes chain outlets, organised standalone outlets and restaurants in hotels is estimated at ₹1.01 lakh crore in 2016 and projected to grow at CAGR of 15 per cent to touch ₹2.04 lakh crore by 2021.Amlani added that the dominance of unorganised market is largely due to over-regulation and challenges for the industry include factors like multiple licences and approvals and high tax brackets.
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