The last year was no less than a shock to the whole world. The whole industry took a massive hit, from which the world is still recovering. Imports are still lacking, as the businesses are still trying to settle down after the pandemic.
The fashion retailers have high hopes from the budget 2021.
Improve Disposable Income of Consumers
The purpose of the budget should be to improve the living standards of people.
“We are expecting that the Government takes some steps which would focus on improving the disposable income of consumers. Also, there should be a reduction in the GST rates on readymade garments that are in the range of Rs 1,000-2,000 per piece to 5 percent from 12 percent, which has been a long-pending expectation in our industry. The Government should also focus on taking measures to improve infrastructure and remove disruptions in the supply chain which would help us reach out to Tier II, III, and IV cities efficiently. We are also expecting a reduction in the income tax which will be beneficial for the taxpayers as it would reduce a burden on them which will further increase the sales in the retail market,” says Sachin Kharbanda Managing Director, Lakshita.
The pre and post effects of lockdown badly affected the fashion retail industry and have led to the loss of jobs for both skilled and unskilled employees. The overall slowdown in the economy has impacted the disposable income, directly impacting the industry and because of this, millions of jobs have been affected, and the retail industry has taken the strongest blow in its history.
“We are certain that the Government will consider making tax reforms to ease the strain on startups. We are hopeful that the Government will introduce the National Retail Policy and allow retailers to register as Micro, Small and Medium Enterprises (MSME). It will help in the credit accumulation, and consequently blocking working capital. Easing up liquidity for giving the business a boost is critical for retail stores,” Rohan Gupta , MD , Gargee Designers states.
Amidst the pandemic, many people have lost jobs due to the hard hitting impact on the retail industry. It would be interesting to see how Government would address the job creation and security issue in this badly-affected economy of the country.
“The Government has taken a lot of appreciable initiatives to secure MSME interest. However, the Government must also focus on the medium and large enterprises dealing with MSMEs. Steps like GST returns filing dates has to be same for all categories of taxpayers as large taxpayers are regularly facing working capital pressure due to non-filing of monthly returns and blocking of input credit. Also, we expect some tax relaxation and incentives in the hands of taxpayers to have more cash in hand and spending power resulting into more cash inflow in retail to boost economy,” says Shivendra Nigam, CFO, Cantabil Retail India Ltd.
Subvention of GST Rates
Fashion retailers want that the government should provide subsidiaries and incentives for the establishment of new ventures, which can act as a substitute for Imports. As the pandemic kept everyone from working, people have now become price-conscious, and they want to spend as wisely as possible.
“The government should support the industry by subvention of the GST rates, so that the consumers get maximum satisfaction and utility out of the products they buy. The Government could also bear the costs of projects so that it attracts more and more people to set up their ventures, maybe in full, or at their maximum capacity,” Ishaan Sachdeva, Director, Alberto Torresi states.
"We are expecting vast benefits in terms of the system of GST. It has become extremely difficult to handle sales GST and sales return with GST reversing. As the number of orders goes up, the need for manual work increases which in turn has to be taken care of. Hereon, e-commerce rules should be structured better with more details,'' says Sachin Shah, Managing Director, Avadat Group resonating the same thoughts.