Union Budget 2023-24 quotes by Akhil Jain, Executive Director, MADAME
1. Ease of Doing Business: A few years ago, the Government proposed to formulate a “National Retail Trade Policy”. The Union Minister of Commerce & Industry informed in the Rajya Sabha on 23/09/2020 that Stakeholder consultations are being held in this regard. The Government had also set up a National Traders’ Welfare Board with the objectives of the welfare of traders and their employees, simplification of the acts and rules applicable to traders, reduction of the compliance burden and improvement in access to funds for traders. The action on formulating the “National Retail Trade Policy” should be expedited to provide the much-needed “Ease of Doing Business” to the fashion retail industry.
2. Goods and Services Tax:
(a) Consumer spending on fashion apparel falls under the ‘discretionary spending’ category. GST @ 12% on fashion apparel is causing high costs for end-consumers. Due to inflationary pressures, the discretionary spending of consumers is going down. GST on all apparel should be fixed at a standard rate of 5% to give a much-needed fillip to the fashion retail industry.
(b) Most of the inputs, services and capital goods required by the retail industry attract a higher rate of GST (mostly 18%), while the output rate of GST is lower. This results in an unutilised input tax credit of GST causing blockage of working capital and increased cost of operations. The Government should amend the formula for calculating refunds under the inverted duty structure category in order to allow unrestricted refunds of unutilised GST on services as well as on capital goods.
3. Technology Upgradation Fund Scheme (TUFS): The retail industry is awaiting the re-introduction of TUFS to reduce its cost of technology upgradation.
4. Production-linked incentive scheme (PLI): PLI for the garments industry should be announced soon in which MSMEs are also able to participate.
