Pending Issues with Delhi Government affecting the operation of restaurants

The following issues have been pending with the Delhi Government affecting the operation of restaurents. The issues are being pursued by the NRAI at the highest level.

Excise Department

• Quarterly payment for issue of L-4 license, instead of Annual Payment
  The Association has made a recommendation that the annual license fee may be allowed to be paid in advance, quarterly, instead on an annual basis, to reduce the financial strain on the restaurants. The Excise Department has rejected the proposal as not feasible , however NRAI will pursue this again.



• License fee increase for Restaurant opening till late
  While allowing the restaurants to open till 0100 hrs, the excise department has also raised the license fee by 25%. This fee has also been made applicable to all restaurants including the family style restaurants which operate only till 12.00 midnight. The Association has made a suggestion to the Excise Department for affording an option to the Family styled restaurants to operate only up to 12:00 midnight, and be allowed to pay their license fee in retrospect i.e. the old fee structure.

DVAT Department

• Imposition of VAT & Service Tax on food catering.
  Many of the restaurants in Delhi carry on catering business in house, as well as outdoor catering and they are required to pay VAT on the total invoice amount and also service tax. As per the current tax structuring, the customers are being Double Taxed on Sale as well as on Service component. Service Tax gives an abetment of 60% on outdoor catering and 40% on in house catering whereas VAT is being charged on 100% of the bill. The Association considers this has resulted into an anomaly and needs to be corrected.

Delhi Pollution Control Committee

• DPCC Consent pending
  Under the existing guidelines, the large restaurants are mandated to apply to DPCC for consent in the prescribed form. The applications submitted to the committee by the restaurants in the year 2007, still have not been responded to. The DPCC has issued notices to the Restaurants to comply with certain requirement such as installation of ETP, etc. A meeting was held with officials of DPCC and it was understood that in the case of applications pending since 2007, consent may be deemed to have been given.
  
  As regards, installation of E.T.P., it is must now for restaurants with 36 and above seating capacity.

NRAI petition inter alia against the increasing license fees by music societies Phonographic Performance Limited (PPL) &   Indian Performance Rights Society (IPRS)

The National Restaurant Association of India has filed a Writ Petition in 2005 against Phonographic Performance Limited, Indian Performing Rights Society Ltd. and Union of India challenging the provisions of the copyright act and the arbitrariness on the part of the two societies in fixing the license fee to be charged from the restaurants for playing music in restaurants on which these societies have copyrights. The matter is still pending in the High Court and there is no “stay order� However interim orders have been passed with regard to the special events conducted by the restaurants when they play the copyright music of the societies. For such events the court has ordered that the said music societies would charge license fee as prevailing prior to the year 2005 rates subject to 15% increase thereof, only for specific events to the petitioners alone.

Favorable decision given by High Court against the petition of MRP provision in the standards of Weight & Measures rules to restaurants

The Association filed a Writ Petition against the applicability of provisions of the Standard of Weights and Measures Act with regard to sale of mineral water and beverages in excess of MRP printed on the packaging during the service to the customer in restaurants. The High Court in its orders dated, 5th March 2007 accepted the contention of the Association and ordered that charging prices for mineral water in excess of MRP printed on the packaging during the service to customer in restaurants does not violate any of the provisions of the SWM Act as this does not constitute a sale or transfer of these commodities by the restaurateurs.

Against the said orders of the High Court the Union of India have filed LPA and also application u/s 151 CPC for stay. The High Court had admitted the LPA, but did not agree to stay the orders mentioned above. Therefore, there is no restriction on the price to be charged on service of packaged mineral water bottles to its customers in restaurant premises.

Restaurants got relief from Police Traffic for using vehicles for home delivery

After a persistent follow up with the Police authorities for a long time, the National Restaurant Association has succeeded in getting the following circular issued on 20.9.2007 by the Dy. Commissioner of Police Traffic (HQ), Delhi. This has provided the much needed relief to the restaurants for using scooters/motorcycles fitted with a small box on the rear seat for home delivery of food to customers.