Budget'17 should aim to boost online start-up culture, say e-commerce heads
With the Union Budget to be announced on February 1, we caught up with e-commerce and online services companies to get their expectations from the upcoming Budget
With the Union Budget around the corner, we caught up with e-commerce and online services companies to get their expectations from the Budget. The last few months have seen a lot of disruption in the market due to the demonetisation drive and online start-ups and companies will now be hoping that the government introduces tax reforms and other sops to improve consumer sentiment.
"Keeping the startup industry in mind, the most important thing for a government to do is to steer clear of setting too many policies and rules as well as make doing business very straightforward and easy. Minimum governance is actually very good," said Abhiraj Bhal, Co-founder of UrbanClap
Shylaja Shreedharan, Head of Finance of Timesaverz, feels that with the government being sustained with high tax collection due to demonetisation, it is expected the budget will propose low personal and corporate tax rates. Speaking about the Start-up India campaign, she said it would benefit if more of indirect and direct tax incentives are announced by the government. "Digital India (was) a buzz word after demonetisation drive, (I) expect some tax exemption for digital transactions which will be a good incentive for e-commerce start-ups."
Rajiv Vij, MD & CEO of Carzonrent.com feels one major concern in the development process is inadequate infrastructure, congested roads, parking problem and increasing pollution levels ,where the solution lies in the introduction of shared economy in urban mobility complemented by technology to encourage change in car ownership pattern. “This can remove 25 on road cars with one car – thus reducing traffic woes and easing pressure of creating parking infrastructure for exploding population of automobiles owing to improving economic profiles of households. Introduction and clarity of policy and regulatory framework in urban car rental services’ formats, like self-drive/ car sharing will help the cause and also encourage investments in the segment. Allowing private car owners to share their cars with others using car sharing platforms and removing inter-state entry tax on cars/taxis will be welcome steps,” he says.
Sunil Kumar Gupta, Founder & Director of ExportersIndia.com, feels the government’s intention of lowering corporate tax to 25 per cent in FY’16 has raised hope for a further plunge this year, with an anticipated drop of up to 18 per cent, including all surcharges and CESS with withdrawal of all tax incentives and concessions, etc.
"This would not only boost the overall tax revenue, lead to job creation but also turn India into an attractive international investment destination. With cashless economy and the given trends of incentivising cashless transactions on focus, it seems that more such schemes encouraging digital payments in the FY17 may be announced that are sure to set the cash registers ringing for online businesses. GST is one of the best things to happen to B2B E-commerce; its early implementation and addressing issues related to Tax Collection at Source, treatment of refunds and cancellations etc. should spur the growth of SMEs,” he adds.
Speaking specifically about start-ups, Vishwavijay Singh, Co-founder of SaleBhai.com, opined that the industry still has to see proper implementation of the slew of initiatives announced in the last Budget session. “While a tax holiday of not less than five years would help startups, even the three-year relaxation for those set up between April 2016 and March 2019 is underutilised because of the tedious registration process,” he says.
He was further of the opinion that both private and government banks need to have a policy in place for start-ups. “Apart from help in opening accounts, there isn't anything on offer. We hope to see some dramatic changes and concrete steps being taken to help startups, especially e-commerce, from the upcoming Budget," he adds.
One of the major announcements expected to be announced in the budget is the rollout of the new GST regime, which has seen a number of ups and downs since it was first mooted. With the government having pressed forward with the initiative despite some vocal opposition, and most of the deterrents to the unified tax regime now seemingly placated, it does look like India could see the rollout very soon.
"This budget is very important as we are expecting it to be the foundation stone for GST rollout. Govt should step forward and provide more clarity over dual layer GST structure - state GST and centre GST. We expect government to make TDS claims process easier. Service tax eats big chunk of the profitability right now and there are instances where we are seeing dual taxation on the same service. Government should act upon the same. Though government cannot force state governments at this juncture but central government must push state government to abolish entry taxes which are being levied by different states,” says Shrutam Desai, Co-founder of Onlymobiles.com.
Giving his views on how the government could help boost start-ups, Sandeep Aggarwal, Founder of Droom and Shopclues, asked for an autonomous business landscape for entrepreneurs with minimal government intervention.
“India must enhance various policies to ensure that capital in easily accessible to entrepreneurs. Having said that, government should not intervene when it comes to funds or bank loans. Rather, entrepreneurs should be provided easy access to seed funding, VC funding and angel funding. No capital gain for any kind of start-up sale or exit. Make foreign listing for any Indian company straightforward rather than the company having to incorporate itself in every country individually. Give R&D credit if someone is making innovative tech product,” he recommends.
Swati Bhargava, Co-founder of Cashkaro.com, expects the budget to be very positive and favourable
towards the poor, middle class and business community, particularly since these segments were most inconvenienced by demonetisation.
“In a bid to alleviate this pain, we can expect incentives on direct tax. This could mean lower personal income tax rates and lower corporate tax rates too. With cashless economy taking centre stage, the government has already taken a number of steps to encourage electronic payments. We could see the Finance Minister announcing a list of measures as incentives for digital payments which will benefit the e-commerce industry as a whole. We might also get clarity on the long standing topic of introducing GST. Prime Minister Narendra Modi's flagship project, Startup India might get a push in the upcoming Budget. We could see a new set of tax concessions on employee stock options, unlisted securities and convertible instruments. Lastly, as a woman and an entrepreneur, I would be most excited to see increased allocation towards building infrastructure in India and increased planned public expenditure. This would go a long way in creating a safer and more conducive environment for women and furthermore in creating world class companies. Overall, as a taxpayer and a founder I am eagerly waiting for February 1,” she says.
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