Finance Minister Arun Jaitly is about to annnounce the Union Budget 2017. This is going to be one of the major events after demontisation. Let's throw upon how retail industry is hoping from upcoming budget.
"First and foremost, we hope that the Union Budget is singularly focused on concrete measures to revive the economy and boost consumer sentiment. Demonetization particularly has left a trail-blaze of depleted consumer confidence in its wake. So we hope that the FM’s briefcase has the antidote our nation needs for an upswing in sentiments. Secondly, we hope that the Government provides much-needed clarification on the GST front. We look forward to hearing about a precise timeline, fixed & final GST rates and the exact mechanism and structure for the input-tax credit.”
Govind Shrikhande, Customer Care Associate & Managing Director, Shoppers Stop Ltd.
"One of the major expectations and anticipated amendment from this budget is tax reform which would increase in disposable income in the hands of an individual. There are expectations that there would be revision in individual tax slabs. Also, the interest deduction for income from house property may also be amended. Any reduction in personal tax rate will act as a boost for the retail sector as surplus cash in hands of the individual increase their purchasing power.
With the deadlock on GST being cleared and Hon’ble Finance Minister announcing that GST would be implemented from 1stJuly 2017, do not expect any major changes in the indirect taxes. Focus would be on the tax rates under which each and every category would fall, which I don’t think would be released in this budget.
Currently, retail business is done both through cash as well as card payments. Wallets have also started to occupy a share of business. But, still, 50% of the business is done through cash. Post demonetisation, the Government is pushing for a cashless economy. Retailers are spending anywhere between 1% and 2.5% as commission on the value of transactions done through digital means. Retailers hope that this budget would pave way for reduction in this cost as incremental digital payments will have an impact on the profitability of the retailers.
With respect to Corporate Taxation, it is widely anticipated that there would be reduction in the overall tax structure. Any change in the corporate tax structure will augur well for corporates. Also, the current Minimum Alternate Tax (MAT) rates are quite high at 18.5%. There have been consistent requests from Corporate for a review of the same. We expect that this might be addressed in this year’s budget and the rates would be lowered.
With the back of demonetization, expect the Budget to be tax friendly and hope it helps the Retail Industry in more ways than one."
Arun Ganapathy, CFO, Spykar Lifestyle Pvt Ltd
"The budget this time is expected to have measures that will improve liquidity in the market. Post demonetization, there is a strong expectation on reduction in income tax slab, which will further aid disposable income. A better tax structure will directly have a positive impact on retail.
Implementation of GST will be a big step that will impact retail. Most categories are expected better margins which may be passed on to consumers leading to higher sales. GST would be the sweeping reform for retail.
It is expected that there will be a further move towards a cashless economy will improve plastic economy and world over has aiding retail spending."