Post Demonetization & Initial GST Impacts Must be Taken Carefully: Union Budget 2018

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This is the time when entrepreneurs are coming forward in high numbers and sharing their opinions, demands, and recommendations in their respective bid to make Indian economy better.

After all role of the entrepreneur is significant in nation building and role of MSME entrepreneur is even important. Now, there is a clear message from this segment that corporate taxation needs an overhaul to boost up production and to counter the ill-effects of demonetization. These ill-effects are normally termed differently by different people. For example, some call them as teething problems of the initial phase of demonetization and some call it a phase of the struggle for business.

However, whatever may be the fact, but entrepreneurs are certainly interested in witnessing pro-business policies from the government.

While hailing Prime Minister Modi’s style of governance, New Delhi based seasoned entrepreneur Mr. Vikram Mittal, Director, Swastik Solvent Products (India) Ltd. in an exclusive discussion with SMEStreet, “The new government has been a bold government. It has not shied away from taking bold decisions even if it meant that its on-ground support groups would be directly hit. Demonetization boosted the Digital India program which has been a huge step forward, while GST was essential to ushering in the ‘Make in India’ movement. But these are benefits that will accrue in the medium in the long run. In the short run, however, the economy is still recovering from these massive but necessary shocks.”

In order to ensure the recovery, Vikram also mentioned the best way forward, he said, “The forthcoming budget, therefore, must focus on on-ground production boosters like reduced corporate taxation, modified asset depreciation schemes, increased financing opportunities for start-ups and reduced but streamlined accounting procedures. With the vision that the benefits accruing to the producers would, in due course of time, percolate to the labor force in the form of higher salaries and increased employment opportunities.”

Nikhil Rohera Partner, Corporate and International Tax at PriceWaterhouse Coopers listed out some bullet points as part of his wish list from the Union Budget 2018.

He mentioned, “Tax benefits for the salaried class through re-introduction of standard deduction and revision of allowances must be included in this year’s budget. Finance Minister Arun Jaitley must carve out tax provisions to streamline proceedings under Insolvency and Bankruptcy Code. Continuation of investment allowance with lower thresholds will boost CapEx investments and this point can surely motivate investors,” in addition he also mentioned, “The extension of patent box regime to income from the sale of patented products will ultimately motivate innovation as a practice among entrepreneurs.”