Budget 2015: Expectations of retail sector?
The moment of truth is here. It’s time for the new government to present its first full budget – and is perhaps the most anticipated budget in recent years. There is a lot riding on this budget as it will reveal the government’s attitude towards development and growth. The government’s pro-business approach has raised the hopes of corporate India - with all industry sectors anchoring a lot of expectations on it. Retailers, on their part, are looking forward to a pro-growth budget as promised by the government. A budget that promotes ‘Make in India,’ facilitates skills development and actively encourages getting the dividend out of demand in India. There are over 12 million retail outlets in the country, employing 33 million + people. Yet, retail is not anchored under any ministry. As a significant contributor to the GDP, employment and the economy of the country; a significant expectation from this budget for retailers is to get recognised as an industry that needs nurturing. Prime Minister Narendra Modi has been talking about the 3Ds of India: Democracy, Demography and Demand. The ‘Demand’ can be successfully milked only if retail is given an industry status and if a national retail policy is formed. The government has given due importance to Goods and Services Tax (GST). Now, the retailers expect an announcement for the starting date for its implementation which will be an important step in removing the various artificial trade barriers and in return will be a huge boost to trade in the country. GST can help retailers reduce the cascading impact of taxes and also help them in creating supply chain methods based on transportation models rather than taxation models. Retailers pay hefty amount of service tax on various expense items including rent and maintenance charges. Since the money is not adjustable with sales tax charged on the sale of goods, the input credit is lost. Only GST can solve this issue. The industry expects the government to recognise this and give abatement on service tax on rental until GST comes into force. It will also eliminate the unnecessary issues that various states face with regard to inter-state billings by e-commerce companies. Foreign Direct Investment (FDI) in retail has been another highly debated point. India is the only country that distinguishes retail by brands (multi-brand and single-brand). Another thing that requires attention is the rules related to e-commerce. Currently, there are no well-defined, clear rules pertaining to e-commerce. As a result, the industry is being split by channels of trade. Retail can at most be segregated by categories of products and services traded rather than by channels or brands. There is an urgent need to create a retail policy that addresses FDI in such a way = that it creates a level playing field. Hopefully, this year’s budget will give directions for a more healthy internal trade policy. More clarity about retailers getting money through ECB European Central Bank) and FII (Foreign Institutional Investor) route will allow retailers to get international funds without losing management control. The entire retail fraternity has set its eyes on this one, hoping that it marks the beginning of ‘Achchhe Din’ for retail in India.
Source : Moneycontrol.com
The moment of truth is here. It’s time for the new government to present its first full budget – and is perhaps the most anticipated budget in recent years. There is a lot riding on this budget as it will reveal the government’s attitude towards development and growth. The government’s pro-business approach has raised the hopes of corporate India - with all industry sectors anchoring a lot of expectations on it. Retailers, on their part, are looking forward to a pro-growth budget as promised by the government. A budget that promotes ‘Make in India,’ facilitates skills development and actively encourages getting the dividend out of demand in India. There are over 12 million retail outlets in the country, employing 33 million + people. Yet, retail is not anchored under any ministry. As a significant contributor to the GDP, employment and the economy of the country; a significant expectation from this budget for retailers is to get recognised as an industry that needs nurturing. Prime Minister Narendra Modi has been talking about the 3Ds of India: Democracy, Demography and Demand. The ‘Demand’ can be successfully milked only if retail is given an industry status and if a national retail policy is formed. The government has given due importance to Goods and Services Tax (GST). Now, the retailers expect an announcement for the starting date for its implementation which will be an important step in removing the various artificial trade barriers and in return will be a huge boost to trade in the country. GST can help retailers reduce the cascading impact of taxes and also help them in creating supply chain methods based on transportation models rather than taxation models. Retailers pay hefty amount of service tax on various expense items including rent and maintenance charges. Since the money is not adjustable with sales tax charged on the sale of goods, the input credit is lost. Only GST can solve this issue. The industry expects the government to recognise this and give abatement on service tax on rental until GST comes into force. It will also eliminate the unnecessary issues that various states face with regard to inter-state billings by e-commerce companies. Foreign Direct Investment (FDI) in retail has been another highly debated point. India is the only country that distinguishes retail by brands (multi-brand and single-brand). Another thing that requires attention is the rules related to e-commerce. Currently, there are no well-defined, clear rules pertaining to e-commerce. As a result, the industry is being split by channels of trade. Retail can at most be segregated by categories of products and services traded rather than by channels or brands. There is an urgent need to create a retail policy that addresses FDI in such a way = that it creates a level playing field. Hopefully, this year’s budget will give directions for a more healthy internal trade policy. More clarity about retailers getting money through ECB European Central Bank) and FII (Foreign Institutional Investor) route will allow retailers to get international funds without losing management control. The entire retail fraternity has set its eyes on this one, hoping that it marks the beginning of ‘Achchhe Din’ for retail in India.
Source : Moneycontrol.com
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