Despite several deadlines, 70% of restaurants in South Delhi haven’t renewed health trade licences

By: |
August 8, 2020 3:30 AM

NRAI has also sought clarity from the North Delhi Municipal Corporation and NDMC on their extension programme, Goyle added.

Most of the restaurants in south Delhi accommodate up to 50 seats.Most of the restaurants in south Delhi accommodate up to 50 seats. (Representative image)

The bulk of restaurants operating in upscale south Delhi have not renewed their health trade licences so far, underlining the impact of the pandemic on the sector. Data sourced from the South Delhi Municipal Corporation (SDMC) showed that nearly 70% of restaurants have not renewed their licences despite the deadline having been extended several times.

Sandeep Anand Goyle, managing committee member of the National Restaurant Association of India (NRAI) and owner of Essex Farms, told FE that though the SDMC has further pushed the renewal timeline to August 31, an abrupt increase in the annual licence fee has come as a jolt to the industry in the current circumstances. Restaurants with a seating capacity of up to 50 seats will need to pay a licence fee of Rs 21,000 ( including processing charges of Rs 1,000) for FY21, a nearly 100% increase year-on-year. Most of the restaurants in south Delhi accommodate up to 50 seats.

Goyle said the change in fees was notified to the industry only recently and easing of the charges would require an approval from the standing committee, a time-bound process. “The increase in the amount of the fees is pinching the industry which is already facing a pandemic-induced cash crunch. Most of the restaurants are in the midst of renegotiating rentals and reassessing their business plans. Only a handful of operators who manage self-owned properties and those that have managed to renegotiate rentals with landlords have gone ahead with the process,” Goyle said.

NRAI has also sought clarity from the North Delhi Municipal Corporation and NDMC on their extension programme, Goyle added.

Restaurants across the country had been shut for more than two months due to the lockdown and were allowed to resume operations only in early June. However, the government’s initial decision to impose a night curfew and the continuing restriction on serving liquor compelled a considerable number of restaurant chains to limit operations to takeaways and deliveries. A few that restarted dine-in services have seen minimal footfalls. Loss of business, dim prospects of near-term normalcy and unrelenting landlords forced some outlets operating in expensive areas such as Khan Market to shut stores.

AD Singh, founder & MD at Olive Group of Restaurants that owns brands like SodaBottleOpenerWala, earlier told FE that the group expects to end up shutting two or three restaurants. Quick service restaurant chain Wow! Momo also plans to shut 25-30 outlets by September.

The industry is seeking help from the authorities by way of giving lifeline to employees from the ESIC insurance corpus, allowing the service of alcohol for diners, removal of ITC (input tax credit) for the industry, declaring the pandemic as a force majeure and deferring statutory payments for the current year.

The restaurant sector employs 7.3 million people.

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