Restaurant owners have given a warm welcome to a law granting tax breaks on renovations, passed in the Senate on Wednesday.

The bill could cost Customs an average of $400,000 and will give concessions on Customs duty for improvements.

Janet Jack, Managing Director of the Bombay Bicycle Club, Rosa's Cantina and Chopsticks welcomed the The (Temporary Customs Duty Relief) Bill 2002 and said major renovations at Chopsticks would qualify, as the bill provides relief backdated to January of this year.

"We are thankful we got (in) under the wire."

She said the work was paying off as business at the Reid Street venue was booming.

"We have renovated basically everything at Chopsticks and it has made a large difference," she said.

The bill will provide Customs duty relief for restaurants until December 31, 2004. Government hopes it will improve eateries for tourists, similar to the way hotels had upgraded under the Hotel Concessions Act.

"It seemed unfair hotels had it as it was difficult for us to compete," said Ms Jack. She said a lot of restaurants which had put off renovations after September 11 would now be tempted to spend some money on their physical plant.

She said: "I think some of the smaller coffee shops will now be able to afford major renovations.

"Everyone had a drop in business; I think it will help. We could have done with it a while ago. It's levelled the playing field for everyone and the restaurants are grateful."

She said there might be more renovations at Rosa's Cantina, which has suffered in the tourist downturn, as a result of the act.

Pasta Basta manager Fosco Nannini, who also has Pirate's Landing and Il Palio, welcomed the bill and said he had already spend around $10,000 on new equipment and was now waiting for a rebate.

"We like to renovate every couple of years."

Freddies owner Kathy Powell said of the new law: "It's a good idea".

She said it could help her replace broken furniture while major renovations might be a possibility further down the line.

"There's all kinds of thing you could do."