Budget 2017-18 | Ecommerce Demands – by HippoCoupon
E commerce is among the briskly growth in India. The market has grown from about $4.4 billion in 2010 to $16 billion in 2015. There are prospects that it will hit $76 billion in the end of 2021. With the government emphasis on fewer cash transactions, key players in e commerce look forward to major benefits and considerations in the budget 2017-18.
The economy is looking to the minister of finance with high expectations. E commerce stakeholders are no exceptions. The Union Budget 2017 is expected to come up with the raft of incentives for the ecommerce sector because for any country ti grow, it has to leverage it on ecommerce it is important to note that this beign a sector with lot of growth potential, new entrants are bound to be many.
It is important, therefore that the budget 2017 will offer incentives for both he startups and existing players.
Indian e-commerce sector expectations | Pre-Budget 2017
Anil Talreja, partner, Deloitte Haskins & Sells, discusses the expectations for the Indian e-commerce sector ahead of Budget 2017 Read more on ...
The exceptions of the startups are that tax breaks will be given. A tax advantage that the government extends to an entity. This could be in form of increasing the corporation tax rate from current rate of 34% to something like 60%. Further to this, tax exemptions and tax credits are also expected to be given to startups. An initiative called startup India was started in the month of Jan 16 and Budget 17 provides a perfect opportunity for the government to actualize it.
The government’s move to demonetize the Rs 500 and Rs 1000 currency is also expected to be on top of the finance minister’s priority. There was hue and cry over the move since a cashless system. E commerce players are expecting the govt to put in place incentives that will increase the volume of cashless transactions. This could be in the form of either reducing or eradicating service tax for online spending. Further to this, the unbreakable sectors of the economy currently stands at 233 million. Big E commerce players like ebay, Snapdeal, Amazon who are boosting their sale by coupons like ebay coupons etc are expecting budget 2017 to five financial institutions incentives to reach out to this group because the ripple effect will hugely benefit them
The cost of credit is slightly high in India compared to other world economies like China. Startups in ecommerce have increasingly found their profit margins being wiped off by the high interest rates. Budget 2017 should create a fund that lends specifically to this sector.
Budget 2017 should come up with fiscal policies that will accelerate investments. Such policies include improving the dispute resolution mechanisms and increasing the subsidiaries offered to the e commerce companies.
Stakeholders in the industry anticipate the government to provide incentives for digital transactions by rebating the service tax. They look forward to a rationalization of the goods and services tax or the relaxing of tax on commission to increase the cash flows. In addition the budget 2017-18 is expected to exempt e commerce stakeholders from section 79 to allow them focus on cost acquisitions.
Secondly, experts in the industry are of the view that the budget 2017-18 will resolve the issues of entry and the direct levied of e commerce activities. The government is expected to amend the levies charged on the intermediaries to bring to an end the illegation on some e commerce players. This is expected to rejuvenate the industry. The move would create an enabling environment for he 1.45 million employment opportunities forecast in the industry by the end of 2021.
The e commerce players are also waiting eagerly for the government’s nod to revise the characterization of taxes. The resident and resident players have been under the yoke of income and consequent tax stalemate. The government’s intention to increase to intensify the cashless system can receive the boost through the friendly tax classification.
The Union Budget is also expected to settle the historic issue of value addition that has elusive of an ample resolution marketers who repair of add value to products sold online have been regarded as manufacturers and the government has been charging them the appropriate taxes in the category. The value adding services include bundling, sorting, labeling, and refurbishment. Considering that the goods are already taxed during the mainstream production, the e commerce players are hopeful that there will be a change in policy.
In conclusion as the finance minister Mr Arun Jately prepares the budget, ecommerce players in India are apprehensive that the government will set the industry on high acceleration. The projected growth if $76 billion can only be realized if the incentives are friendly enough the allure more participants. With the government ‘s intention to increase cashless transaction. there is hope that the union budget 2017-18 will be responsive to the deserved expectation.