By – Harkirat Singh, Managing Director Woodland shares his 2015 budget expectations for the retail sector.
This Union Budget 2015, we hope the government will announce the implementation of GST. It will be an important step to remove the various artificial trade barriers and in return will be a huge boost to trade in the country.
GST should subsume all indirect taxes, including Road Tax, R&D Cess and Octroi etc and can help retailers reduce the cascading effect of taxes. GST will not only bring in changes in excise & custom duties but also lower the rate of taxation and encourage higher compliance.
We believe the government would lay emphasis on the realignment of slab rates. Friendlier slab rates would increase cost of living and inflation, bringing in greater purchasing power and allowing increased disposable income in the hands of the consumers. As the consumer buying power affects the retail market, measures would have to be taken to curb inflation.
The retail sector is also expected to generate huge employment opportunities but would require incurring significant employment-related costs. The upcoming Union Budget must look to provide solutions for employment incentives and deduction of employment costs.
Growth in domestic manufacturing is flat and imports are on the rise and marginal concession given earlier has failed to attract any new investments in setting-up of new factories.
To provide stimulus to manufacturing sector, it would be best to completely remove the excise duty, as there is no excise on garments and this paradoxical provision must go as it contradicts the spirit of the statute. Immediate addressing is important to eventually help in making India a great manufacturing hub.
The government should also look at laying down some ground rules pertaining to boosting the e-commerce sector at the Union Budget.