Budget Wishlist | Industry status for organized retail sector

Budget Wishlist | Industry status for organized retail sector
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First Published: Tue, Feb 26 2008. 02 20 PM IST

By according industry status to organized retail sector, lending norms will get fixed and retail issues channelized through a single ministry which will push up efficiencies and profitability
By according industry status to organized retail sector, lending norms will get fixed and retail issues channelized through a single ministry which will push up efficiencies and profitability
Updated: Tue, Feb 26 2008. 02 20 PM IST
New Delhi: Supermarkets in large, medium and small formats across residential clusters will transform the shopping experience for people in tier I and tier II cities, over the next decade.
By according industry status to organized retail sector, lending norms will get fixed and retail issues channelized through a single ministry which will push up efficiencies and profitability
There is consensus on the fact that the retail sector is on a fast growth trajectory. Now, all out efforts have to be made to take initiatives that can help it retain its competitive edge in a fast changing consumerist environment.
Key Recommendations
* Service tax on rental payments: Currently service taxes are paid on rentals for stores and warehouses taken on lease. This needs to be revoked. Service tax is an indirect tax, the burden of which needs to be shifted. Legislative changes should be brought in and we should be allowed to set it off as input credit against VAT payable
*Review of APMC Act: Retailers should be allowed to source food grains from all sources without restrictive licensing norms. This will lead to higher realization for the farmers’ produce, lower wastages which would in turn facilitate the supply chain investment by corporates
*Single window licensing for store openings: This should be brought into action, instead of the prevailing current multiple regulator system that leads to situations of multiple interpretations of law. Long-term licensing periods instead of the yearly renewals will improve operations significantly which will lead to simplification in obtaining licenses
* Accord industry status to organized retail sector: This would require lending norms to be fixed which are more or less discretionary now, passing of regulations and channelizing retail-related issues through one single ministry
*Have common goods and services tax regime across India
*Waive off FBT: This waiver should be on the promo spent for the industry where margins are under severe pressure and new companies are significantly investing by way of financing losses and major CAPEX expansions
*Give input credt under VAT: Assets purchased for retail activities should be given concessions in the structure for imports including customs duty from its current level of 35 % to 16%, C Form usage for all retail assets, Input credits to be given under VAT for all the above assets
Pushpamitra Das is CEO, Wadhwan Food Retail P. Ltd. (Spinach)
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First Published: Tue, Feb 26 2008. 02 20 PM IST