Stating that the pandemic had badly impacted the financial position of individuals, the retail industry has sought relaxation in tax slabs for individual taxpayers to spur spending, while recommending that the single system of taxation be reintroduced.
In its recommendations for the upcoming Budget for the retail sector submitted to the Finance Ministry, the Confederation of Indian Industry (CII) has also sought reduction in custom duties on furniture imports, revamping of local testing facilities for import of items such as toys, and amending laws under GST to enable return of goods by customers pan-India at any store.
“During the FY 2020-21, a lot of people have lost their jobs. Most employees have faced reduction in salary. Pandemic has impacted the financial position of individuals badly. Considering the situation, it is recommended that tax slabs for individual taxpayers should be relaxed to provide relief in this tough time,” the CII said.
The option to choose the taxation system has created more confusion for the taxpayer, it added.“Taxpayers in India are dependent on advice of tax experts for taking decisions. It has further made withholding tax compliance complex for the employer. It has resulted in an increase in cost of compliance for the taxpayer. Further it has also resulted in tax leakage,” it said.
For economic revival of the sector, the CII has proposed that customs duty on furniture products and raw materials to make them be reduced and frequent changes to the rates should be avoided. “This will help in growing the industry and create more jobs for the Indian youth. This will go a long way in making India competitive to do business and make products affordable to the consumer.”
On recent shift in the verification of compliance to the standards from Manufacturer Declaration to Local testing, the industr body said while it’s good that the country is becoming increasingly aware and working on increasing the quality standards of products being sold in the country, it should not be done without developing the relevant infrastructure in the country to verify these compliances.
For instance, it noted that till November 2019, all importers of toys had to get a manufacturer’s declaration that the toys being shipped are compliant to the relevant Indian standards and based on the declaration and test reports the Customs Officer would release the cargo. Post that, DGFT prescribed changes in import regulations that said that the customs authorities would draw samples and send it to local labs for testing.
For each article of toy imported, the importers draw samples and hand it over to the customs officer for sealing and allocating the lab for testing. Once the lab has been allocated the samples are sent through post to the labs which does not have any tracability, so importers have to rely on calling the labs to confirm receipt and status of testing, the industry body said. It added that these labs are not all located in the city of import and can be sent to any lab in India making it very challenging.
Hence, it has recommended that the government should first develop test labs infrastructure near major ports of India and implement such changes only after the necessary infrastructure is in place.
