Thursday, May 24, 2018


Restaurant strike 99% successful in Mumbai; No support from MNC chains
Thursday, 02 May, 2013, 08 : 00 AM [IST]
Akshay Kalbag, Mumbai
Hotels and restaurants across India downed their shutters recently to protest against the ambiguous provisions of the Food Safety and Standards Act (FSSA), 2006, and the service tax levied by the Centre on air-conditioned eateries that serve alcohol.

Shashikant Shetty, secretary, the Association of Hotels and Restaurants (AHAR), a Mumbai-based body, informed FnB News via telephone that although the eateries incurred losses worth approximately Rs 2,000 crore, there was an overwhelming response to it.

In fact, he said the strike was 99 per cent successful in Mumbai. “The indifference by the multi-national quick service restaurant (QSR) chains was disappointing,” Shetty said. However, he added that it was deliberate on their part.

“Jubilant Foodworks Ltd (the master franchisee for Domino's Pizza), McDonald's, Yum! Brands (which operates KFC and Pizza Hut) did not support us. The intention of the MNCs is mala fide. They want to wipe the smller Indian players out,” he said.

“Even Faaso's, the Indian fast food chain offering wraps, did not join the protest,” he added. Others who stayed away included the fine dining restaurant The Great Kabab Factory and the upscale casual dining eatery Chili's.

He added that AHAR will take a call on the next step only after they get in touch with other bodies, and hinted at another form of protest. “We are awaiting the next date for the hearing in the service tax case. It is slated to take place after the court resumes after the vacation,” he said.

Nationwide scenario
Over 20,000-22,000 eateries and sweet shops across the city remained shut. Maharashtra backed the day-long strike wholeheartedly, as did other western states like Goa and Gujarat, the central state of Chhattisgarh, and the Union Territory (UT) of Daman.

In fact, three of the four southern states – Andhra Pradesh, Kerala and Tamil Nadu – also supported it. Shetty said Karnataka could not participate, because they are scheduled to go to the polls shortly.   

He added, “The only region from which we have not received any information about the strike yet is eastern India.” In addition to the service tax (which pushes up the total on the bill by almost five per cent), 12.5 per cent value-added tax (VAT) is also levied.

“The most heartening fact is that restaurateurs in Meerut, Uttar Pradesh, are delighted, because they have got the state government's assurance on VAT and the Centre's assurance on service tax,” Shetty said.

AHAR – which has over 6,000 members – had filed a petition before a division bench of the Bombay High Court, comprising chief justice Mohit Shah and justice M S Sanklecha, stating that certain rules of the Food Safety and Standards Act (FSSA), 2006, are not applicable to eateries.

“We are not food manufacturing units, which come under the purview of the Act. Food is merely cooked in restaurants or hotels and served to the patrons. Cooking food is not manufacturing,” Shetty stated.

“FSSA has framed ex-facie, ambiguous and unconstitutional rules and should be declared null and void. The association has sought a directive from the bench to the state government to create separate rules for food service providers,” he said.

Adding that AHAR – which expects that the government declare that the Act is applicable to food manufacuring units – would meet the bench again, Shetty said, “Another cause for concern is the hygiene issues raised by food safety officers when they visit the kitchens in our establishments.”

“At lunch hour, things are hectic in a kitchen. Scraps are bound to fall to the floor, and the sink is bound to have undone dishes. To focus on these, instead of the operational issues, is ridiculous,” Shetty added.
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