Income tax relief for the middle class to boost consumption, a rethink of the mandatory 45-day payment deadline for micro and small enterprises, restructuring of GST rates, measures to promote exports and simplify IT imports, were some of the ideas presented by industry leaders to Finance Minister Nirmala Sitharaman in pre-Budget consultations held on Thursday.
Ms. Sitharaman also met representatives from the financial sector, including venture capital (VC) providers, who made a pitch for allowing the country’s pension and insurance funds to invest in alternate assets and expanding the angel tax exemption list to include registered foreign VC investors. The Indian Venture and Alternative Capital Association also sought a review of the Competition Commission of India’s definition of ‘control’ which covers private equity investors with minority stakes under its ambit.
Assocham requested the government to raise the basic income tax exemption limit from ₹3 lakh to ₹5 lakh, and said the standard deduction offered to taxpayers must be doubled to ₹1 lakh to adjust for inflation. Such tax concessions would lead to growth in consumption without affecting the government’s fiscal position, the industry body argued.
While most industry leaders stressed on helping micro, small and medium enterprises (MSMEs), the Bengal Chamber of Commerce (BCC) said changes to the Income Tax Act that mandate payments to SMEs within 45 days have made things difficult as a 60-90-day credit period is the industry norm. The chamber mooted aligning the IT law with the Central GST Act that disallows payments made beyond 180 days, and expanding its ambit to cover medium-sized firms.
BCC also flagged concerns about “great hardship” involved in import of laptops, which now require five approvals in addition to an import licence. Till India becomes self-sufficient in electronics, sourcing will hinge on imports and non-tariff barriers may create a scarcity and push up prices, it noted, seeking a reconsideration on the matter.