Served From India - Not Really Yummy - Bombay High Court upsets 'Yum Restaurants'
YUM Restaurants India Private Limited are famous for running the popular food chains, Pizza Hut, KFC and Taco Bell in India, but that couldn't be the reason for them to figure in DDT.
Under the Foreign Trade Policy of 2004-09, there was a scheme called SERVED FROM INDIA SCHEME (SFIS), the objective of which was to accelerate growth in export of services so as to create a powerful and unique 'Served From India' brand, instantly recognized and respected world over. All Service Providers were eligible for a duty credit scrip.
The 2009-14 Policy continued this scheme with the same objective, but the entitlements were made for Indian Service Providers instead of All Service Providers.
Yum Restaurants India Private Limited has provided wide range of management services to Yum Asia Franchise Pte. Ltd., Singapore in respect of franchisees located in Nepal, Bangladesh, Sri Lanka, Mauritius etc. They applied for the SFIS scrip and was denied the same by the DGFT on the ground that the name of company represents brand not essentially identified as Indian brand.
A single Judge of the Delhi High Court set aside this order of the DGFT and allowed the benefit. This is the famous Yum Restaurants case reported by us in 2015-TIOL-225-HC-DEL-CUS.
While this was holding fort, recently a Bombay High Court judgement upset the Yum judgement.
The Bombay High Court ruled that the intention is to accelerate growth in export of services so as to create a powerful and unique 'Served From India brand' instantly recognized and respected world over.' That cannot be achieved by permitting those who are not creating a powerful and unique 'Served From India' brand instantly recognized and respected world over. The entity establishing a foreign brand of service and prior to entry in India therefore, will not qualify and cannot be held eligible for FSIS benefit. The brand of such an entity is already created, existing and established. It may not be unique much less served from India exclusively. That does not get instantly recognized and respected world over as Indian brand.
The High Court observed,
With greatest respect to the learned Single Judge of the Delhi High Court he has construed the policy narrowly. The complete picture of the policy, its objects and purpose was not placed before him. With great respect, we disagree with the learned Single Judge. The learned Single Judge failed to note that parties like the Petitioner do not have a vested right in seeking or claiming incentives and benefits under what we call as Duty Credit Scrips. It is only when they fulfill the criteria and the provisions of the nature carved out that they would be entitled to the benefits.
Now the situation is those exporters from Delhi are eligible for the SFIS Scrip, while those from Maharashtra are not and for the rest of the Country, the respective High Courts must decide, while export is from INDIA. This case is obviously heading for the Supreme Court.
Position under Foreign Trade Policy 2015-2020: Maybe the Government conceded to YUM and changed the whole scheme in the new policy. Now it is called Service Exports from India Scheme (SEIS) and the objective is to encourage export of notified Services from India. The eligibility is for Service Providers of notified services, located in India.
Will Yum Restaurants India Private Limited come under the new objective and eligibility? Will the DGFT respect the Government?
We bring you this Bombay High Court order today. Please see Breaking News + Also see video headnote of Yum Restaurant