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    What retail & consumer good companies want from Arun Jaitley this Budget

    Synopsis

    The retail and consumer industry also insisted that the budget should widen the tax slabs for individuals, which would in-turn lead to increased disposable income.

    hasmukhPTI
    The retail and consumer industry also insisted that the budget should widen the tax slabs for individuals, which would in-turn lead to increased disposable income.
    Retailers across the country have asked the government to grant industry status to the sector for easier access to finance and attract more investments even as FMCG player seek lowering of GST rates, in the run upto the budget. The demand to simplify GST system comes from across the board. The retail industry is also seeking relaxed FDI regime for multi-brand retail trade (MBRT).

    The retail and consumer industry also insisted that the budget should widen the tax slabs for individuals, which would in-turn lead to increased disposable income.

    In a pre-budget wish list to Finance Minister Arun Jaitely, the Retailers Association of India (RAI) said, “Industry Status for Retail Sector would provide the sector with support in accessing the financial system and hence allow for more investment in the sector and also allow the critical sector to be eligible for all support and incentives as applicable to other industries.”

    Another demand from the retail sector is affordable and accessible billing system (both hardware and software) to small retailers. There is a need to make accepting digital payments attractive to retailers either by making them cheaper than card payments or by incentivising acceptance, according to RAI.

    Another significant demand that retailers have made is with regards to GST. The government should provide for GST Refunds to international tourists, promoting tourism and retail. GST invoices issued to these consumers be further simplified by eliminating the mention of HSN codes on them, removing the need for manual signature and multiple copies.

    “We hope that the budget gives lots more in the hands of individual consumers for them to be able to go out there and buy. If consumption in India increases, it re-emphasises the democratic dividend that India has and this will further support the Make in India movement in the country,” said Kumar Rajagopalan, CEO, RAI.

    Mall owners also have a wish list for the finance minister. They seek single window clearance for mall and shopping complex owners. “We are a combination of real estate, retail and hospitality once construction of a mall is over and so have to run to multiple government departments for approvals and licenses. If there can a single window clearance for us it will reduce a lot of hassle,” said Abhishek Bansal, executive director, Pacific India Group.

    “..the 2018 budget provides the Government with a perfect platform to widen the tax slabs for individuals, which would in-turn lead to increased disposable income. This would stimulate consumption and boost retail markets. Also, industry status to retail would help give access to funding to MSME retailers amid increased completion from other channels,” said Sanjay Vakharia, COO Spykar Lifestyle.

    For FMCG firms and consumer goods companies, rationalisation of GST tops their expectations from the budget. Biscuit maker Parle Products category head Krishna Rao said, “With the rollout of the new budget, FMCG players expect a rationalisation of GST rates and slabs to a fairly promising extent.”

    At present the GST rate on biscuits and related products is 18%, however, since it is a mass consumption food product and similar products are subject to lower tax rate, Indian Biscuits Manufacturers Association (IBMA) also called for bringing down GST rate to 5-12%.

    “This is a labour oriented industry and mostly local workers get employment. Besides, other food products such as processed dry fruits, sweets, tea and juice have been kept in a 5% bracket,” IBMA president B P Agarwal said.

    A similar sentiment was echoed by the consumer durable industry which argued that appliances, such as air conditioners, refrigerators, washing machines and others, are no longer considered luxury items but necessities that improve and spur people productivity.

    “Such consumer appliances need to be made more affordable to the consumers and therefore be put in a lower tax bracket - from 28% to 18%. There should be further tax reductions on energy efficient products - 12% for 5 star and 4 star products, to increase the adoption of sustainable appliances by Indian consumers. There should also be incentives for manufacturers to produce energy-efficient products,” Kamal Nandi, Business Head, Godrej Appliances, said.

    Wish list from retail, FMCG companies
    1) Personal tax exemption limit enhanced to provide more disposable income with individuals driving consumption
    2) Rationalisation of GST rates
    3) Further simplification of GST
    4) FDI regime to be liberalized for MBRT
    5) E-enabling small retailers and incentivizing digital payments
    6) Industry satus for retail sector


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