New Delhi :India Inc expects the Budget to simplify tax laws and increase compliance, apart from improving both the ease and cost of doing business.
“Just as the government has done a commendable job in improving the ease of doing business, we would like more initiatives to reduce the cost of doing business as well,” Tata Steel Managing Director T V Narendran said, adding that he expects the government to further build on its reform agenda.
Debjani Ghosh, Managing Director of Intel South Asia, said, “The Budget needs to walk the talk and show real execution towards the government’s intent of making it easier to do business.”
Hemant Kanoria, Chairman and Managing Director of Srei Infra Finance, said the Budget should focus on streamlining regulations to reduce tax uncertainties and improve the ‘ease of doing business’.
“The finance minister must make provisions to broaden the tax net, and one way to achieve this is to increase PAN registrations, which will result in substantial reduction in black money transactions.
“This will also make the proposed requirement of PAN card for purchases above Rs 1 lakh easy to implement,” Muthoot Pappachan Group Chairman Thomas John Muthoot said.
Daksha Baxi of Khaitan & Co said Finance Minister Arun Jaitley should simplify and bring clarity in tax laws, which will undoubtedly improve tax compliance, thereby increasing revenue.
“Removal or significant reduction in MAT rate will put significant cash flow in the hands of taxpayers to make much needed investments,” Baxi said.
Yes Bank Managing Director Rana Kapoor said he expects the Budget to do everything to restart capital formation and investment cycle.
The finance minister also needs to restore the confidence of the private sector by furthering the reform process that is already under way to improve ease of doing business and de-stress the capital markets, he said.
“The private sector has subdued animal spirits which need to be revived. We need to get more high-octane energy in the economy, the catalyst for which is good capex spends and an accelerated resolution and reforms process,” Kapoor said.
India Inc expects the Budget to simplify tax laws and increase compliance, apart from improving both the ease and cost of doing business.
“Just as the government has done a commendable job in improving the ease of doing business, we would like more initiatives to reduce the cost of doing business as well,” Tata Steel Managing Director T V Narendran said, adding that he expects the government to further build on its reform agenda.
Debjani Ghosh, Managing Director of Intel South Asia, said, “The Budget needs to walk the talk and show real execution towards the government’s intent of making it easier to do business.”
Hemant Kanoria, Chairman and Managing Director of Srei Infra Finance, said the Budget should focus on streamlining regulations to reduce tax uncertainties and improve the ‘ease of doing business’.
“The finance minister must make provisions to broaden the tax net, and one way to achieve this is to increase PAN registrations, which will result in substantial reduction in black money transactions.
“This will also make the proposed requirement of PAN card for purchases above Rs 1 lakh easy to implement,” Muthoot Pappachan Group Chairman Thomas John Muthoot said.
Daksha Baxi of Khaitan & Co said Finance Minister Arun Jaitley should simplify and bring clarity in tax laws, which will undoubtedly improve tax compliance, thereby increasing revenue.
“Removal or significant reduction in MAT rate will put significant cash flow in the hands of taxpayers to make much needed investments,” Baxi said.
Yes Bank Managing Director Rana Kapoor said he expects the Budget to do everything to restart capital formation and investment cycle.
The finance minister also needs to restore the confidence of the private sector by furthering the reform process that is already under way to improve ease of doing business and de-stress the capital markets, he said.
“The private sector has subdued animal spirits which need to be revived. We need to get more high-octane energy in the economy, the catalyst for which is good capex spends and an accelerated resolution and reforms process,” Kapoor said.
IT and telecom hardware makers expect the government to extend differential duty structure on mobile phones for 10 years while bringing personal computers under the regime to give a boost to domestic manufacturing.
The government in the last budget announced differential excise duty structure for mobile handsets, which gave domestic manufacturers cost benefit of about 11 per cent over imported phones.
“Duty structure on mobile handsets and tablets should be continued for another 10 years. Similar duty structure may be introduced on parts, components and accessories of mobile handsets and tablets,” Indian Cellular Association National President Pankaj Mohindroo told PTI.
Mohindroo is also Chairman of Fast Track Task Force – a joint body between industry and government, to promote manufacturing of mobile devices in India. The panel has set to achieve manufacturing target of 500 million handsets and generation of 15 lakh jobs by 2019.
PC makers like Dell, Lenovo and Intel have also sought extension of similar duty structure to encourage manufacturing of the products in the country.
“Several IT hardware players have their manufacturing facilities in India that are currently under-utilized due to weak demand. The suggested duty differential will spur the domestic consumption leading to increased production, thereby boosting manufacturing by these players,” Intel South Asia Director Marketing and Market Development Sandeep Aurora said.
Lenovo India Director for Integrated Operations Vinod K Srivastava said that he hopes that the government rationalises the tax structure to promote manufacturing of desktops and notebooks, as has already been done for tablets and mobile phones.
The Manufacturers’ Association for Information Technology (MAIT) and the ICA have also sought government to come up with tax structure that promotes manufacturing of components used for PCs and mobile devices in the country.
“There is no availability of components, we still rely on China. All the top chip vendors and the semiconductor vendors or component vendors should be permitted to create a component hub in the country. Government can create free economic zones.
“Import and storage of goods should be allowed in these zones without custom transfer pricing lot. The transfer price should be applicable at goods which are sold from the component trading hub not when they are brought as stock,” MAIT Vice President Nitin Kunkolienkar said.
With retrospective taxation continuing to rile foreign investors, the Budget tomorrow may look to address their concerns with a view to resolving the legacy issues.
In an interview to PTI, Chief Economic Advisor Arvind Subramanian has said that the present government is taking “consistent steps” to deal with the legacy tax issues to regain investor confidence.
“Slowly, slowly they (government) are cleaning up the legacy issue. I think they will continue to do so going forward and hopefully so in the Budget. It’s a long drawn agenda that we need to clean up tax system,” he said.
The continuation of multi-billion dollar tax liability imposed by the previous UPA government using a retrospective legislation, has been a matter of concern for foreign investors who had hoped that the BJP government will quickly resolve them.
Earlier this month, the tax department took the unusual step of sending a reminder notice to Vodafone for payment of Rs 14,200 crore of taxes on an issue that is under arbitration.
Even after two years, the arbitration in the Vodafone case has not yet started in absence of appointment of a presiding judge on a three member arbitration panel.
The Rs 10,247 crore tax issue of Cairn Energy Plc of UK could manage to get a full panel constituted, even though the process started much later than Vodafone, only after the issue was brought to the notice of Prime Minister’s Office.
Both Prime Minister Narendra Modi and Finance Minister Arun Jaitley have repeatedly stated that no new tax liability would be created using the retrospective law, the lingering of the disputes have not gone down well with foreign investors.
Many of them had hoped that the government may use the A P Shah panel, that had sorted out the contentious issue of levy of MAT on capital gains made by FPIs and FIIs, to resolve these legacy issues.
A top executive at a foreign company the easiest way to resolve these issues is to refer the pending cases to the Shah panel as they had done in the MAT issue and implement its recommendations.
Subramanian said the government had proactively resolved the MAT issue and is working to do so for the remaining legacy issues.
PTI