Infibeam is not only an e-commerce company, but also an e-commerce technology company. As a part of the emerging e-commerce industry of the country, we are expecting many big announcements from Hon. Union Finance Minister, Mr Arun Jaitley in the coming union budget scheduled for February 28. The expectations are mentioned below:
Entire country has been waiting for implementation of Goods & Service Tax (GST) for the past a few years. It is proposed to roll out by April 2016 across country. In this budget, we expect that FM will lay more specifics regarding the roadmap of GST implementation. With every state being a different country, it has a different tax structure. Once the GST is introduced, entire country is expected to have a uniform tax regime.
At the moment, every state has different VAT rates and for inter-state the tax rates are different. For e-commerce companies, the warehouses are based in different parts of India and the customers are buying it from almost every corner of the country.
If GST is introduced, state government will lose the autonomy. As per proposal, states will be allowed to levy an additional 1% tax on inter-state supply of goods for the initial two years (levied and retained by the producing states). These initial years, the tax structure will be very complex for e-commerce companies. However, once settled, everything will be very smooth and fast. GST regime will be win-win for government, e-commerce companies, and the biggest beneficiary will be the consumer.
We hope that this will not only minimise the cascading effect of taxes, but will also help consumers as the prices will reduce and consumption will increase. We hope that the new regime of GST will discontinue the existing ones (CST, VAT and other taxes). As an impact, it is expected to contribute to the growth of India's GDP in the coming years.
FDI in e-commerce:
At present, e-commerce is still an emerging industry. In the service sector, directly and indirectly, e-commerce industry is generating a lot of employment with each passing day. To further boost the industry, more investment is needed. At the same time, country also needs FDI. To make it a win-win situation for all classes of the society, we are expecting that the FM will allow foreign direct investment in e-commerce. This will help in generating more employment, increase investment in the country, and will further standardise the quality of life of the consumer. As the Hon. Prime Minister of India, Narendra Modi believes in free market economy, the idea of FDI in e-commerce is expected to be implemented.
Exemptions or relief in service tax to boost 'Make in India'
There are many rising brands across country, keen to expand their presence worldwide. They need encouragement from government to create worldwide presence. At initial stage, e-commerce is the best solution for it. It is not necessary for everyone to have a physical presence worldwide, but through an online presence, small scale entrepreneurs or aspirational brands can reach and international audience, and cater to global needs. Hence, we expect FM to give some relief to promote e-commerce technology for Indian brands to 'Make in India' and export.