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India’s brick-and-mortar retail players such as Shoppers Stop and Croma hope that the coming Budget will put more money in the hands of consumers, encouraging them to spend more.
In the e-commerce category, companies are looking for greater clarity on policy, as to which law will govern them.
Retailers are hoping for implementation of the much-awaited Goods and Services Tax (GST).
Some other demands are easier clearances, licences, and clarity on service tax to do business.
National clearanceExpectations are that the Government will take steps in the Budget that will help improve consumer sentiment and infrastructure. Rajat Wahi, Partner, Management Consulting, KPMG India, said there is a need to move away from state-wise clearance to national clearance for multi-brand retail.
The number of licences and permits required (up to 84) by retailers should also be reduced and a single window clearance be introduced.
“The Government needs to look at allowing 100 per cent FDI in multi-brand retail and moving away from differentiation between single-brand and multi-brand. It should reduce sourcing norms from the current 30 per cent for both single-brand and multi-brand retailers and also ease the mandatory $100 million investment in back-end infrastructure by retailers,” he added.
Avijit Mitra, Chief Finance Officer, Infiniti Retail Ltd, which runs the nationwide retail chain Croma, said: “The current tax structure in our country is very cumbersome. The GST, if passed, will be a game changer. We hope for this change to come through as the new tax structure will lead to smooth operations for all retailers. The benefits will be manifold.” Echoing a similar thought, Govind Srikhande, Managing Director, Shoppers Stop, said the announcement of the GST will help make trading seamless across categories and states, and will also help retailers offset the service tax on rent, which is a big cost for the retailers.
Kumar Rajagopalan, CEO of the Retailers Association of India (RAI), said GST will finally help retailers create supply chain methods based on transportation models rather than taxation models.
Talking about FDI in retail, he said, “India is the only country that distinguishes retail by brands (multi-brand and single-brand). There is an urgent need to create a retail policy that addresses FDI in such a way that it creates a level-playing field.”
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