The Union Budget 2017-18 is special in many ways. From the date of presenting the Budget to the transition towards a cashless economy, it is unique. Above all, this budget came four months after the demonetization decision. The demonetization decision was a huge boon to eCommerce industry as the number of people who opted for eWallets and electronic transactions has increased.
In this context, the industry expected huge sops for all their digital transactions and more clarity on the GST bill. While the Government took all measures to bring about transparency and accountability in the system, there was no major change to the indirect taxes like the customs, excise and services taxes and no clarity on the GST Bill.
Following are some of the important aspects of Union Budget 2017, from the eCommerce and startup perspective:
- 5% reduction in the income tax slabs , which means more disposable income at hand and more purchasing power
- Abolishment of the Foreign Investment Promotion Board in 2017-18. The roadmap for implementing same is yet to be announced
- Promotional Digital Economy and planned schemes around BHIM app, AdharPay, introduction of PoS terminals and other related fiscal and policy measures.Tax sops for manufacturers of Point of Sale units, card readers, finger print readers and scanners to encourage indigenous manufacture of these devices
- Payment regulatory board to be set for regulating digital payments
- Incentive schemes to boost the manufacture of electronics in the form of Modified-Special Incentive Package Scheme (M-SIPS) and Electronic Development Fund(EDF)
- Proposal to simplify , rationalise and integrate labour laws
- New Cyber security regulator to be set up
- The introduction of an e-payment framework for all payments made to the government is right on target, and the e-assessment mechanism is likely to be in place in near future
There were a mixed set of responses from the industry experts, and here are some of the noteworthy reactions:
Kunal Bahl, Co-founder & CEO, Snapdeal
We commend the focus on growing the digital footprint in the country enhancing digital infrastructure, capping cash transactions, reducing cash donations, using Aadhar Pay to enable more digital payments are significant measures. Initiatives make an impact when there is continued attention and the announcement of today builds on the demonetization efforts of last few weeks. We also welcome the emphasis on skill development and technical education this will enable India to successfully harness the demographic dividend. The attention to affordable housing, greater employment in rural areas are the right interventions to build a more equitable society.
Mr. Manu Agarwal, Founder and CEO, Naaptol
Government has planned to take digitisation of transactions to the grass-root level and believe it is a good step towards a stronger economy. The convenience of digital payments will instigate the consumers to spend more and I believe it is positive sign for us.
Ashish Hemrajani, CEO and Co-founder, BookMyShow
We look forward to the GST (Goods and Services Tax) roll out in the coming financial year. The e-commerce space will hugely benefit from real time taxation which not only will introduce the required transparency but will further enable free flow of products and services. We also hope that the GST will play a critical role in automating demand curve pricing to a large extent, thereby improving yields and offering much-needed clarity on taxation in the entertainment ticketing space with respect to e-tax for cinema, plays, live events and sports ticketing, similar to airline pricing. A unified tax structure would also help in removing ambiguity and ease the process for e-tax application and collection. The Industry and the Government will both be winners.