Budget 2022 | ‘Tax reforms, relaxed compliance norms’: What retail, e-commerce, logistics sectors expect from FM

Episode 186,  Jan 24, 02:43 PM

The countdown to Budget 2022 has begun and we’re just a week away from finding out what the Union Finance Minister Nirmala Sitharaman has decided for 2022-23 fiscal.

In this edition of the Budget 2022 Podcast, CNBCTV18.com’s Kanishka Sarkar shares what the market wants from the upcoming budget and what retail, e-commerce, and logistics sectors expect from the Sitharaman’s announcement on February 1.

Hiren Ved, Director, CEO & CIO at Alchemy Capital Management told CNBC-TV18 that is important that capital expenditure is amped up because there is a need to stimulate the economy especially at the lower end of the market.

Meanwhile, Sunil Singhania, Founder of Abakkus Asset Management is of the view that there won’t be too much tinkering as far as taxation is concerned – both in terms of direct tax and indirect tax.

The retail and e-commerce industry has demanded a fiscal package to stimulate growth. According to Paresh Parekh, Partner and Tax Leader - Consumer Products and Retail, EY India, one of the key asks of the retail industry has been to accelerate the implementation of the National Retail Trade Policy. This, in order to streamline the growth of all formats of retail trade, reduce compliance and regulatory burden, give industry status to the sector, along with financial incentives to large-scale projects.

The EY official suggests the government could consider bringing in reforms for the long-term problems by committing to complete digitisation where new businesses do not have to wait for months to obtain licenses and permissions under the various laws specific to retail trade in the country.

Cyrus Katgara, Managing Partner at Jeena & Co, has tax reforms and policy amendments to boost the logistics sector.

He explained that the existing policies have exempted air and sea export freight from GST till September 2022. The air/sea freight is exempted from GST if the recipient is within India. However, if the recipient of the export freight is located outside India, the is considered an export of service. That means ITC (input tax credit) cannot be claimed on such service resulting in significant ITC loss for logistics companies.

Therefore, Katgara wants the government to consider all air/sea export freight as export of service irrespective of the location of the recipient.

Meanwhile, sources have indicated that the expert panel, formed by the government to recommend future taxation policy for tobacco products, has not been able to give its final recommendations to the Finance Ministry yet. Therefore, the ministry is independently evaluating the tax structure with respect to tobacco.

Tune in to the Budget 2022 Podcast for more

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