Monday, July 14, 2014
Union Budget 2014-15: A Budget Which Can Transform India's Tax Regime & Business Environment
The Union Budget presented
by Finance Minister Arun Jaitley contains certain logical steps to transform
India’s tax regime to make it more favorable from investment and business per
se. Also it contains the required steps required to create conducive
environment to boost India’s business and economy manifold.
The business community has
expressed the introduction of a national goods and services tax as a keyconcern.
Adi Godrej, the chairman of consumer-goods company Godrej Group said, “A
streamlined tax system will help the business and commerce of India to save great
money, time and effort needed to pay different taxes in each of India’s 28
states.It’s by far the most important reform we all need”
Experts comment that if
implemented, the GST could boost economic growth by 1 to 2 percentage points
Let’s take a glimpse at the
necessary steps listed in the Union Budget 2014-15 which have been lauded by business
and commerce fraternity.
Importance
of proper tax regime is the need of the hour
Stability in tax regime is
crucial for development of India’s business, trade and commerce industry as
well as citizens of India. The proposed tax amendments can revive investor
sentiments and attract huge FDI investments generating massive employment. However,
again there must be determination and right intent to the fulfillment of all the
objectives listed in the budget.
Investors, especially the
foreign investors have expressed great dismay for the unstable tax regime of
India. This has been always the main reason for drying enthusiasm towards investments
and growth of business communities in India.
The
problem of retrospective tax legislation-
The Government’s right to undertake
certain retrospective legislations have impacted India’s economy and overall
investment climate in a negative manner. There were certain retrospective amendments
made to the Income Tax Act 1961 undertaken through the Finance Act 2012. This witnessed
a few cases in various courts &other legal forums, for example the Vodafone
Case in which the Company is liable to pay huge tax as per retrospective tax
laws. Such retrospective tax regime punctures investor sentiments who get discouraged
to invest in India.
The Solution-
In order to overcome this, the
budget upholds tax measures to provide a stable and predictable taxation regime
that would be investor friendly and spur growth. The Finance Minister said that
a High Level Committee will be constituted by the CBDT (Central Board of Direct
Tax). This committee will scrutinize all the fresh cases arising out of retrospective
amendments of 2012 before any action is taken in such cases. This will convey about
a stable tax regime to the investor community both within India and abroad and create
a business friendly environment. It will instill confidence in investors thus driving
India’s growth. Also,the foreign companies can obtain “advance ruling” which
can resolve the huge tax liabilities of companies. Tax demand of more than 4
lakh crores is under dispute and litigation before various Courts and Appellate
authorities. This is one of the serious concerns of all taxpayers in this
country. With such a move where foreign companies can obtain “advance ruling” will
drive more foreign direct investments (FDI) in India. This will ultimately lead
to more employment and improve the standard of living of India thus benefiting
everyone.
Further
are additional noteworthy measures in this year’s Union Budget which will have
a positive impact on India’s business, trade and commerce-
Digital
India
This pan India programme named
“Digital India” would ensure Broad band connectivity at village level. It will enable
improved access to services through IT enabled platforms and greater
transparency in Government processes. This will increase indigenous production
of IT hardware and software for exports. Also and greater transparency in
Government processeswill make the business community and common people feel
more secured. Also if reached to its full potential, it can make every citizen of
India literate and knowledgeable and improve standard of lives.
There’s also special focus to
be given to support software product startups with measures to conduct training
programs for people to acquire IT skills. This has the potential to make India
as the leading IT hub and generate employment for millions.
A move that can propel India’s
industry growth-
The eBiz platform aims to
create a business and investor friendlyecosystem in India. It plans to do so by
making all business and investment related clearances and compliances available
on a 24x7 single portal. It also has the facility of an integrated payment gateway.
All Central Government
Departments and Ministries will integrate their services with the eBiz platform
on priority by 31 December this year.
A move that can propel
India's trade
Exports cannot be
exponentially increased unless the states play a veryactive role in export
promotion. This needs provision of good infrastructure and full facilitation. The
plan to establish an Export Promotion Mission which will bring all stakeholders
under one umbrella is a good move. It will facilitate greater levels of trade
and resolve trade disputesfaster thus propelling India’s trade to a new level.
Skill India
Last but not the least, a
national multi-skill programme called “Skill India” is proposed to be launched.
It would instill the required entrepreneurial skills in India’s youth.
IAM has been helping corporate
personnel acquire business and entrepreneurial skills for over a decade. Several
executives have greatly benefited from IAM’s seminars.The list of companies
that have sent their executives for training with us includes industry leaders
and corporate giants as also consulting firms. Please visit website to know
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