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FM concludes pre-budget meetings in virtual mode on Monday: Here's what India wants?

The pre-budget consultation meetings for budget 2023-24 chaired by FM Nirmala Sitharaman concluded on Monday.

The meeting was held in virtual mode between November 21 and 28. More than 110 invitees representing seven stakeholder groups participated in eight meetings scheduled during this period. The stakeholder groups include representatives and experts from agriculture and agro-processing industry; industry, infrastructure and climate change; financial sector and capital markets; services and trade; social sector; trade unions and labour organisations and economists.

The Budget 2023-24 would be tabled in Parliament on February 1, 2023.

So, what does India exactly want from its FM Sitharaman in Union Budget 2023-24?

Here's what exporters want?


Earlier, in a pre-budget meeting with Finance Minister Nirmala Sitharaman, Federation of Indian Export Organisations (FIEO) said depreciation of the rupee against the US dollar is affecting exports' competitiveness and due to that the sector requires more support.

"Creation of employment is the biggest challenge faced by the country....We would urge the government to provide fiscal support to units who provide additional employment in the export sector. Such a scheme will also help workers move from informal employment to formal employment," the federation said.

Incentives may be provided based on the twin criteria of growth in exports and growth in workers so that while on the one hand exports are increased, on the other hand, employment intensive units also get a boost, it said, adding that when global demand is declining, it becomes all the more necessary to go for aggressive marketing.

It also asked for a 200 per cent tax deduction on the expenditure made by exporters for overseas marketing. On freight, it said Indian exporters remitted USD 82.65 billion as transport service charge in 2021.

It suggested that GST refund to foreign tourists at the airport has not yet been operationalised and such an initiative will not only give fillip to tourism but will also help in exports of handicraft, non-precious jewellery, carpets, textiles, khadi, and leather.

Pre-budget demands of Farmers' bodies and food processing industry?


Farmer organisations have asked the government to lift the ban on exports of items like wheat and restrict import of products that cost below the minimum support price (MSP). They also demanded that the government focus on increasing domestic output of local oilseeds such as soybean, mustard, groundnut and sunflower, instead of palm. India has restricted exports of wheat and broken rice to boost domestic supply and contain inflation.

Imposition of higher taxes on processed foods was another suggestion made by farmers' bodies during the virtual meeting with finance minister Nirmala Sitharaman. To reduce dependence of India on edible oils import, the industry also suggested focusing on increasing domestic production of soybean, sunflower and groundnuts.

Wishlist of miners' body FIMI?

Miners' body FIMI has sought withdrawal of export duty on bauxite, stating that the move will lead to optimum utilisation of low-grade mineral resources as it will expedite reopening of closed bauxite mines, create jobs and earn foreign exchange. Bauxite is the principal ore of aluminum and therefore the mineral is the essential raw material for aluminium producers.

"The export duty of 15 per cent on bauxite is detrimental to the Indian non- metallurgical bauxite producers and exporters...This Federation therefore request for complete withdrawal of export duty on exports of bauxite," FIMI said in its pre-Budget proposals to the finance ministry.

What India Inc wants?

In a pre-budget interaction with finance minister Nirmala Sitharaman, industry representatives suggested an increased focus on creating jobs, boosting domestic growth and consumption, and further rationalisation of taxes. They also highlighted the need to stick to fiscal discipline amid an uncertain global situation and high inflation.

"Further simplification, rationalisation, ease of paying taxes, and reducing tax litigation should be key priorities," the CII president said, while suggesting keeping corporate tax at the current levels.

Ficci asked the government to continue the thrust laid on capex, which had aided a quick recovery from the Covid impact. A strong thrust on public capex will crowd in private investment and give a boost to overall growth, it said. Ficci president Sinha recommended initiatives like Gati Shakti and Digital India Mission to be implemented at a swift pace to boost the competitiveness of the economy across segments.

States' wishlist?

State finance ministers in their pre-budget consultation, stepped up their demand for more funds, a greater say in implementing centrally-sponsored schemes (CSS) and an increase in payments for royalty on minerals.

Tamil Nadu Finance Minister P Thiaga Rajan said that states, cutting across party lines, said that centrally sponsored schemes are constraining states' fiscal autonomy since in some schemes states end up contributing large amount which is more than the Centre's contribution. States demanded that they should be given greater flexibility in implementing CSS. CSS are implemented through a joint contribution of the Union Government and State Government

Cut in personal income tax rates?

The most important question on everybody's mind is whether the government will roll out any income tax cuts or not. It won't be an easy decision to make. Industry body CII has batted for income tax cuts to boost disposable incomes at a time when recession in advanced economies will chip away some of the domestic growth momentum particularly due to slowing exports.

But, according to industry experts, any reduction on the income tax front will complicate the fiscal math at a time when India's strong economic fundamentals are likely to act as a magnate for global capital flows.

While the government will want to spur demand by putting more money in the hands of the consumer, cutting taxes won't be an easy decision in the wake of global uncertainties.

Source - https://economictimes.indiatimes.com/

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Author:

TaxReply


Nov 29, 2022

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Excellent reporting
By: Khettra Muhan Roy | Dt: Nov 29, 2022


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