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A Time Target For GST

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With the Budget slotted for March 16 2012, corporate India has expectations from the Finance Minister. Here's what manufacturing and retail sector is looking for in the coming budget.

Manufacturing" Anand Sundaresan, Managing Director, Schwing Stetter & CII Chairman, Chennai Zone
"On the macro level, the manufacturing sector is looking for clear and confirmed time targets for implementation of GST. In the last budget, the government has withdrawn the input credit of service tax paid for construction work of a new manufacturing facility. This increases the project cost by almost 3.5 per cent. This should be reviewed and rolled back."

He added, "On the micro level; on specific issues relating to the construction equipment  industry, there are two issues, which we have taken up with the respective secretary through CII:-
a.      Excise exemption under notification 108/95 C.E. dated 28.08.95. This is ambiguous. The responsibility vested on the manufacturer should be removed, since the manufacturer has no control on the machine.

b.      Excise exemption notification 34/2006-C.E. dated 14.06.2006. This is also ambiguous. A levy of 5 per cent excise duty is an additional burden on the manufacturers."

Retail sector: Jaydeep Shetty, CEO, Mineral

"Most likely the Budget will be as much a political exercise as it is a sane approach to collecting and deploying money.  We are still recovering from the multiple shocks of increased fuel prices,  galloping inflation, the drop in the rupee's value against other currencies and the not-so-encouraging IIP reports. The prognosis doesnt read very good for the immediate next two quarters but some change in the policy making think-tank can help.

I am optimistic that this budget is going to be different.

I shall hope for a raise in the minimum slab for personal tax eligibility for individuals earning Rs 300,000 per annum, simply because putting money into these hands must propel higher spending.

More spending on healthcare specially on those below poverty line would be most welcome. Tax rebates on home loans must go higher than what it is currently, with much of the middle class paying about 40 per cent of their income repaying home loans, and thereby reducing their disposable incomes.

With food sources growing scarcer, the government needs to provide a better investment climate to companies and individuals that can bring in advances in storage facilities and better supply chains.

Allowing basic banking licences to micro-finance institutions may also make their services accessible to more Indians specially in remote areas where there is little access to basic banking facilities.

The Centre has always neglected two industries that provide for much of employment and economic growth: organized retail and real estate.

According the two sectors industry status will go a long way into bringing in qualified talent and sizeable investments into the space, not to mention access to organized finance.

Apparel Retailers this year has been hit on many fronts. One, the service tax on rent, which accounts for a 2-3 per cent hit on margins, and excise which accounts for another 4.5 per cent. This takes away a retailer's margins and also these costs are finally passed onto the consumer. Lowering or removing these taxes could bring down prices and increase demand considerably.

Over the last 6 months, India might have lost a bit of its sheen with FDI.  Political bureaucracy is probably one reason. But sectors like apparel retail and also liberalizing FDI in services may help generate faster growth.

Its high time the government looked positively at 51 per cent FDI in multibrand retailing. International players will actually bring in great systems, business processes, better logistics and know how into the industry and we can benefit a great deal."