- This year’s budget to be startup friendly especially because of demonetisation.
- Startups looking for relaxation in tax policies.
- The Finance Department should give a firm date on implementation of GST and the burden of compliance should be kept minimal.
Union Budget 2017-2018 is all set to be announced by Finance Minister Arun Jaitley. This year's budget is different as it comes post the demonetisation announcement that managed to create chaos in the lives of common man as we thronged to banks post the currency ban and shortage of cash at ATMs.
The focuss this year is expected to be giving initiatives like Make in India, Digital India and Startup India a further push. And, the startup community has been quite vocal about what it expects from the Budget 2017. It expects more in the form of relaxation in tax policies, GST and more.
The most important aspect is tax relief, which includes relief from TDS, service tax and also from compliance related to foreign funding. This could help startups use their funds for effective growth in the initial days. Many entrepreneurs believe that the government should offer tax benefits to all those using digital payment options.
Himanshu Bindal, CEO & Founder, One Internet said, "We expect this year’s budget to be startup friendly especially because of demonetisation. Tax exemptions through online payments such as net banking, UPI, credit and debit cards are likely. A large percentage of Startups & SMEs in India are still facing funding shortage thus they are not able to scale up. An efficient policy framework is required to support this sector that will create swift, easy and efficient loan options for SMEs and Startups."
Many want a further push to the Startup India Action Plan that offers three-year of tax exemption, faster patent registration and more. For this, the criteria is the startup should be a private firm but not older than 5 years and with over 25 crore turnover.
The Startup India initiative is believed to not have benefited many, owing to the extensive documentation required. Research firm Tracxn revealed, "In the 12 months since the Startup India initiative was announced, 522 out of about 1,425 companies that sought certification under it have been approved."
Department of Industrial Policy and Promotion (DIPP) is now believed to forming new tax concessions, but easier eligibility without the tangled documentation is what the startups need. According to Inc42, DIPP is also working on setting up a credit guarantee fund with budget of Rs 2000 crore.
E-commerce startups expect GST implementation and benefits. Saahil Goel, CEO and Founder, Kraftly said, "The Government should implement GST in India as soon as possible, to make eCommerce convenient. Since the Homepreneurs MSMEs segment is booming in the e-retail sector, the government should ideally lift the exemption cap to at least 25 lakhs INR, in order to empower these businesses. One of the main issues that the eCommerce sector faces is the logistics. Right now, the State and Central tax make running a business cumbersome. Once GST comes into the picture, selling online would be much easier."
"Other reforms which can be expected from the government to lift the startup sector include increasing the period for set off of business losses for e-commerce startups from the present 8 years, to give benefit to such loss-making e-commerce companies. Eliminating or at least reducing the Merchant Discount rates, and incentivizing the digital payment method," he added.
Samar Singla, CEO and Founder, Jugnoo wants the Bike taxis should be defined under 'Negative list' from service tax perspective. "Budget 2017 should benefit the startups scale up and build sustainable model by offering exemption from Income tax to 10 years rather than 3 years. The Finance Department should give a firm date on implementation of GST and the burden of compliance with regards to GST should be kept minimal. Also, the Bike taxis should be defined under 'Negative list' from service tax perspective," Singla added.
Last Updated 31, Mar 2018, 6:46 PM