HOTREMAI Seeks Support from Government
In the current scenario, the manufacturers/ traders are in double trap since they have already exhausted their capital and has no sign of receiving payments from the Hoteliers at this time.
THE HOTEL and Restaurant Equipment Manufacturers Association of India ‘HOTREMAI’ is the nodal representative association of Hospitality industry suppliers from all over India. With more than 3000 fellow members manufacturers and traders together they provide more than 5000 products to Hotels, Hospitals, Education Institutes, Restaurants, Catering and Foodservice Industry.
‘HOTREMAI’ has been representing the industry at multiple platforms to raise the issues affecting the same.
The industry has more than 20000 plus suppliers including the allied industries, most of them are manufacturers covered under the MSME sector. The industry also provides an indirect opportunity to other allied industry providing raw material, spares, logistics and other services. Small MSME businesses help and drive the economy through small manufacturing, trading and services which they provide as less visible ancillary units to the Hospitality and Tourism Sector. Now Burdened with the loss of business, this Hospitality associated MSME units are further frightened to save their work-force to revive as the situation will improve.
Due to the current unfortunate scenario in the country, the hospitality industry, including the partners in allied industries, have incurred huge losses. Being MSME most of the companies comprise of 10-50 employees with an average turnover of Two to Five crores. The industry is like a job provider to the Hospitality and the Tourism Industry, which has come to a sudden halt. All the projects now are at standstill. The small manufacturers have already invested most of their capital on pre-orders/ stock/ raw material which are now lying as dead inventory since there has not been off-take by the Hoteliers, and also there is no exception of off-take in the near future. In the current scenario, the manufacturers/ traders are in double trap since they have already exhausted their capital and has no sign of receiving payments from the Hoteliers at this time.
Rather they are further trapped because of the operational expenses and salaries which are ongoing, recurring, perishable and non-productive expenditure.
"Looking at the current scenario and even based on the time to recover losses made during this time period and the time by when the industry shall be streamlined, we are looking forward to a buffer which can help us sustain ourselves. Otherwise, if the situation prevails for the extended period, most of the units will be at the brink of bankruptcy," said Anil Malhotra, President, HOTREMAI.
In a letter seeking support from the government to meet the losses caused due to COVID-19, HOTREMAI asked for help as per the following parameters:
1. Request subsidy to the Hospitality ancillary MSMEs manufacturing and service sector to cover loss of labour payments to be made without work during the period of prevailing crisis. This will generate the trust and confidence for revival amongst all those affected.
2. Request to waive off fixed electricity charges for the next 3 months and charge only on the basis of actual consumption.
3. PF and ESI may be deferred for the next 3 months, to be collected in proportions in the next nine months irrespective of the number of employees and turnover of the company.
4. In the recent budget, there is an increase of import duty on Hotel Equipment and supplies. Request to roll-back to prebudget duty structure.
5. The advance Tax for the 1st quarter 2020-2021 should be postponed for the next 3 months.
6. Due to the lockdown, various shipments are stuck at the ports. Request to waive off the Demurrage charges.
7. Allow companies to retain 25% of the output of the GST until the situation improves.
8. Request the support from banks with increased CC limits to the extent of 20% of their existing CC limit with their present collateral and at reduced interest rates.
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