By Saroja Yeramilli
Union Budget 2020 India: Under Prime Minister Narendra Modi’s guidance, we have seen some positive policies from the government for the different industry sectors last year – from being a pro-start-up budget to enabling ease of business for budding entrepreneurs. The government has also been placing a lot of emphasis on technology for scaling up. We hope that the budget to be announced will look a step ahead and cover new ground.
Budget 2020: Reduction in import duty of gold
The budget last year was conducive for online retailers like Melorra given the emphasis on digital payments and waiver of fees on such transactions. However, it was discouraging to see the increase in duty on gold import from 10% to 12.5% and the fact that there was no mention of a Corporate Tax deduction. We hope that this time there will be some reduction in the import duty on gold and extension of exemption from capital gain to the gems and jewellery sector. This is for cases where the jewellery sold is reinvested in new ones.
Watch Video: What is Union Budget of India?
Budget 2020: Single window compliance for regulatory approvals
For startups (especially those that are led by women), we hope to see the government bring about a single-window compliance for regulatory approvals and other processes. This will enable them to focus on their business better.
Some other considerations include tax incentives to incubators registered under the Atal Innovation Mission (AIM), simplification of GST, and clarity on employee stock ownership plans (ESOPs) tax benefits, etc.
There is a need to make ESOP taxation available to employees at the time of sale.
Currently, the direct tax laws and rules continue to be unclear to many and a new direct tax code can help in simplifying tax legislation, removing exemptions, and widening the tax base.
There has already been a 25% increase in the trading rate of gold in this financial year. Any further increase in the import duty will lead to price hike and reduce overall consumption.
We are also witnessing a shift in the buying trends of consumers – from voluminous and bulky gold to more affordable, trendy, and lightweight options, due to the age-old sentiment associated with purchasing gold. We hope that the import duties are reduced in the long term as this will restore the balance in the market. All these policies will bring about better compliance and organized practices in the jewellery sector.
The columnist is CEO and Founder, Melorra. Views expressed are the author’s own.