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Eating out at South Delhi may become dearer

In a bid to increase its revenue, the newly formed South Delhi Municipal Corporation (SDMC) is planning to increase the health licence fee charged from restaurants to about Rs 50,000.

delhi Updated: May 28, 2012 23:53 IST

Eating out in a south Delhi restaurant may soon cost you more.

In a bid to increase its revenue, the newly formed South Delhi Municipal Corporation (SDMC) is planning to increase the health licence fee charged from restaurants to about Rs 50,000.

At present, the municipal corporation charges a miniscule amount of Rs 1,500 for three years from restaurants in commercial areas. For eateries on mixed land, a one-year licence is granted for a fee of just Rs 500.

“The government is slowly killing the goose that lays the golden egg. They're nickel and diming us to death," said AD Singh, owner of Olive restaurants.

The new corporation would be altering the age-old health licensing policy of the erstwhile Municipal Corporation of Delhi (MCD). Now, restaurants, according to their size and price list, would be classified into different categories.

Based on these categories, the restaurants would be charged accordingly for health licence, a mandatory licence without which an eatery cannot function. The health licence is given to restaurants after inspection by municipal corporations to certify that the restaurant is hygienic.

“We'll be charging the new fee according to the location, price menu and the size of the restaurant. For a plush restaurant in commercial areas like Saket or South Extension; it could go up to Rs 50,000 for a year. We'll be conducting a survey and a list of restaurants would be prepared,” a senior SDMC official said.

The cash-rich SDMC, with an existing surplus of Rs 360 crore, is aiming to increase its revenue by over a Rs 100 crore in the next financial year.

“To increase our revenues, instead of increasing the tax on properties and burdening the common man, we would be charging more health fee from restaurants. The common man should be kept away from the net of tax,” the officer added.

Restaurant owners, however, say that the hike in the licence fee will lead to an increase in the cost of food served in the restaurants.

"Our industry has so many overheads in terms of payment of taxes that ultimately the pricing of food increases. If health licence fees are increased, food will get costlier," said Sumeet Chugh, owner of Nizam's Kathi Kabab chain of restaurants.

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