There is lot of expectations from Narendra Modi government’s first budget which is likely to be presented in the first week of July. The business owners and young entrepreneurs are keeping high expectations from the upcoming budget given that in the last decade no concrete measures have been taken to eliminate unwarranted delays in starting a business or for reducing hassles of taxation and reporting with various authorities.

GST, Tax exemption, Service Tax relief are some of things entrepreneurs want from first budget of Modi Sarkar : 

Implementation of the Goods & Services Tax (GST):

Investors are expecting the new government to announce its roadmap for implementation of the Goods & Services Tax (GST). There has been a demand to shift from complex tax structure to a simpler GST, which is considered as a game-changer. The GST is expected to broaden tax collection and spark spending, adding as much as 2 percentage points of growth to Asia’s third-largest economy. Credit Suisse has predicted that GST would be the first ‘high impact’ legislation taken up by the new parliament. However, the government may find it difficult at the moment to pass GST as it also requires support from the state governments. Investments in Pharma industry and R&D: From an industry standpoint, investment in the life sciences R&D outsourcing can prove to be a great success similar to what IT was in the late 90s. India with a large population can play a significant role in Clinical trials and drug development. Initiatives to spur investment similar to what has been created by “A Star” in Singapore would be welcome step. This can create millions of jobs. Both foreign and domestic investment needs to be harnessed.  Arun Jaitley in his upcoming budget should spell something in this direction. Service tax exemption limit: Threshold for applicability of Service Tax should be enhanced from Rs 10 Lacs to 15 Lacs. There should be a threshold limit of Rs 10.00 Lacs for Service recipients also which at present is nil. The cost of compliance for this is relatively very high for all such assesses who are otherwise not subject to any other service tax / cenvat compliance obligations. Putting a threshold will facilitate taking out the small ticket service tax payers under this Head. Tax Exemption / relaxation to new businesses: The New budget should simplify the tax rules; improve tax compliances and lower tax litigation.  In terms of new businesses and startups, its time taking and complexity of the system results in a slow rise in new ventures. IT services giants like Infosys and Wipro benefited immensely with tax holidays on IT exports. Similar tax incentives are much needed for current IT startups as well and for startups in industries like healthcare and manufacturing. The business startups in India can be given tax exemptions on the line of Singapore tax exemption scheme for new startup companies as per which a newly incorporated company that meets certain qualifying conditions can claim for full tax exemption on the first $100,000 of the normal chargeable income for each of its first 3 consecutive assessment years. A further 50% exemption is given on the next $200,000 of the normal chargeable income for each of the first three consecutive assessment years. This will give great boost to our startups that have to start paying taxes right from the first year onwards and on every single penny of profit it makes. Startup tax: Government sometime back amended the law to restrict issuance of equity shares at a premium and attached various conditions on it. The law states that that portion of consideration received for the issue of shares of a public unlisted company or private company that is in excess of the fair market value of those shares, will be subject to tax in the hands of the companies under the head “income from other sources”. With the introduction of this clause the participation of private equity funds or high net worth individuals has been affected and there is a serious impact on genuine start-ups and other Small and Medium Enterprises, as they largely depend upon angel investors or private equity funds for their funding. People are hoping that new finance minister should give relaxation in this aspect since this provision is creating hindrance in the developing culture of angel investors and private equity funds, funding innovative entrepreneurs, who have the desired skills but have limited resources. Single window clearance: The current structure has very difficult compliance requirement for businesses. An entrepreneur in addition to registration of his business entity also has to go through the process of getting host of other state and central specifics registrations / approval like trade license, environment approval, Service Tax registration, Excise, VAT and a few more. The most difficult part of this is that these registrations are obtained from different departments of the State or Central government. Instead of going through all this processes, there should be a single window(an online platform or offline) where he gets end to end information about the registration, compliances, taxes, etc. The platform should provide a common place to get clearances for central as well as state level formalities. Steps should be taken to reduce interaction between public and staff of Government officials with the help of Technology. Thus there is a need of a system which should grant all type of clearances in the form of a single window mechanism to all types of projects. To conclude: All eyes are now on the new finance minister as to how he will balance the budget books without hurting the people sentiments. The challenge for the Finance Minister while preparing his budget is going to be how he shall restore back the pace of growth, control inflation and concentrate on fiscal consolidation.