Goods and services tax could help retail dream
It involves a who’s who of industrial giants, but the future they face is laced with worries. Saurabh Turakhia elaborates.business Updated: Jun 18, 2009 21:28 IST
It involves a who’s who of industrial giants, but the future they face is laced with worries.
The Indian retail industry has the presence of several big business groups -- the Rahejas (Shoppers Stop), Mukesh Ambani's Reliance Industries Ltd (Reliance Retail), Aditya Birla Group (More), Goenkas of the RPG group (Spencers) and Kishore Biyani's Future Group (Big Bazaar) — but is yet to take off in a big way.
The industry hopes the budget for 2009-10 will accord an industry status as organised retailing is poised to grow to $32 billion by end of 2009 from $25 billion in 2008.
Thomas Varghese, CEO, Aditya Birla Retail Ltd said retail industry can generate huge employment opportunities if conducive atmosphere was created. “In the next five years, retail can create jobs for 10,000 managers, 70,000 store heads and 14,00,000 store front staff.”
Varghese’s wishlist includes adoption of bar codes using global identification standards, mandatory financing of retail projects by banks, relaxation of foreign direct investment (FDI) norms and doing away with the regime that specifies maximum retail price (MRP) on goods.
Angel Broking’s retail research analyst Raghav Sehgal listed a few critical demands that the Indian retail industry would have from the forthcoming budget. “Firstly, the sector should be given an industry status so that there can be a particular ministry that can address the sector’s issues.” Sehgal also added that implementation of the single Goods and Service Tax (GST) will ensure there will be no double taxation for the industry.
He called for a quicker approval procedure through a single-window clearance. “Right now, over 40 different approvals are needed for opening a store,” he said.
Other demands from the retail industry, Sehgal said, included removal of service tax on rentals, removal of the fringe benefit tax (FBT) and the replacement of the current taxation norm with a flat integrated corporate tax structure. The current regime involves a surcharge and an education cess.