The Union Budget 2017 is unique and historic in many ways starting with advancement in the date of presentation of the Budget to February 1 consolidation of the Railway Budget to the backdrop of demonetisation effects and proposed GST implementation.
In the run up to this budget, the Indian economy that just seemed to have stabilised on a growth trajectory registering GDP growth of around 7.6 per cent was subjected to a sudden slow down with the bewildering demonetisation announcement. The decision though commendable from the combating black money perspective, has caused significant liquidity issues and is expected to have lasting impact on a number of sectors including Real Estate, automobiles, FMCG.
While the government has been projecting its strong commitment to restore the economy on its growth track, its political rivals are vehemently highlighting the long-lasting ill effects of demonetisation. The political turmoil has also led to slow down in the implementation of GST, the largest reform in the indirect tax space.
Considering this rough run up, there are high expectations of the government announcing various “feel-good” factors in the Budget 2017. Following are some of the key expectations from Budget 2017:
Ms. Jayashree Kurup, Head of Content & Advisory- Magicbricks.com.
We feel the Budget announcement should be to achieve four goals:
- Remonetise real estate to enhance consumer sentiment
- Make finance available to industry to complete stalled projects
- Make facilitating policy changes to give clarity to the proposed policies like GST
- Create equitable tax structure to leave more money in hands of consumer to buy real estate
To achieve these , the budget needs to:
- Stimulate demand, through tax incentives to consumers so that they have more money in their wallet to buy real estate
- Enhance tax breaks on property purchase by increasing the tax exemptions on housing loan principal and interest deduction
- Offer financial protection from project delays by allowing Section 80C and 24 deduction on under construction properties
- Rationalise the 30-35% taxation on the industry
- Formulate specific valuation rules to allow deduction of land value from transaction value and clarification on whether developer or contractor gets credit under GST regime.
Mr. Anuj Kushwah, Managing Director and founder of Kaama Impex Pvt. Ltd (Witlinger Beer)
“Beer drinking habits are changing in the country on a very fast pace. People are looking for good quality beers with varied taste. Imported beers offer solution to this new need. This segment has great potential to grow. Since domestic beers do not offer similar quality and taste, government should look into slashing custom duty on beer. Once imported beer brands see bigger market in India their next step will be to brew domestically, thus creating huge employment opportunity. However liquor is kept out of the GST and it is a big hurdle in smooth distribution. Therefore, the beer industry can look forward to ‘Budget 2017’ for two main elements: reducing custom duty on imported liquor in India and including alcohol beverage in proposed GST. This will give a shot in arm to the overall business as well as create more avenues for consumers to enjoy their favorite drink.”
Dr. P. M. Bhujang, President, Association of Hospitals
“He emphasized that the import duty rates on medical equipment used by hospitals for life saving treatments are very high and ranges from 24% to 26%. There is an urgent need to bring down these fiscal rates to a single digit if not total exempting them.”
“He also indicated that the government must encourage to build more and more hospitals in the country and to do so the government must keep the services rendered to a hospital away from the ambit of service tax. The exemption on service tax on the inputs will reduce the cost to the hospitals and consequently cost of medical services to a patient. Moreover VAT on medicines, implants and consumables used for patients in the hospital in the course of his/her treatment should not be applicable since those are obviously not sold separately.”
“In some parts of the country the Service Tax Department is of the view that only services rendered by the doctors to a patient is exempted from service tax and not the services rendered by the hospital. A patient cannot get medical treatment only from the doctors without the infrastructure provided by the hospitals. For instance, for conducting a surgery an operation theatre is needed by a surgeon to do the necessary surgery. Many hospitals face this threat of unjustified service tax demands, a clarification circular/amendment needs to be issued at the earliest.” he further added