Speciality Restaurants, owners of brands like ‘Mainland China’, ‘Oh! Caclutta’ and others, has taken a hit on its bottom-line after GST and the subsequent absence of input tax credit under the new regime.

According to Anjan Chatterjee, Founder and Managing Director, there has been a near 18 per cent jump in cost and a subsequent 12 per cent impact on its bottom-line.

“It (absence of input tax credit) is a problem not just for us, but for the entire hotel and restaurant sector. We are hoping that things will change soon,” he told reporters, while briefing about the 25-year journey of the company.

To offset the cost rise, a 3-4 per cent increase in prices has already been initiated.

The restaurant business body National Restaurant Association of India (NRAI) had previously sought that they be given Input Tax Credit (ITC) benefit, which was taken away from them after the November GST Council meeting.

Speciality Restaurants for the first nine months of the year reported a net loss of ₹24 crore. Losses in the comparative year-ago period stood at ₹14 crore.

However, Chatterjee is confident of an improved show. “In Q3 (Oct to Dec 2017), we reported a net profit. Some unprofitable restaurants have also been closed down,” he said.

Limiting expansion

However, the increase in cost, after GST, has impacted capex plans for Speciality Restaurants.

While the company will invest ₹40 crore over the next 18-24 months to add 8-12 retaurants in India, Chatterjee said this could have been higher had his costs not gone up.

New restaurants will be spread across both existing and new brands.

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