IndiaRetailBiz

P C Chidambram, Union Minister of Finance, will be presenting the 2008-09 budget tomorrow on 29th February, 2008. While, most analyst believe that, being the last full budget of the UPA government, it would be a populist budget, it is to be seen as to how it would help consumers. The retail sector also has its wish list ready for the Finance Minister. FICCI has prepared a charter of demands for the US$ 12 billion ‘organised’ retail sector, which is currently growing at 30-35% per annum.

Here is a list of major demands:

• The sector should be granted industry status.

• Uniform tax structure should be implemented. Gradual shift from the various state taxes to uniform tax would result in ease in sourcing goods efficiently and in turn aid the growth of the retail sector. The introduction of VAT in all states would result into the scrapping of differential sales tax prevailing in different states on the same product.

• Allow retailers to adjust the service tax on all inputs (rents and telephone) against the sales tax they collect from customers. The retailers’ who pay the state VAT do not have any output service tax against which they can set off service tax paid by them.

• Eliminate multiple licenses and clearances. Retailers need to obtain licenses and permits such as basic trading licenses, product specific licenses, pollution clearances etc for every retail outlet (even its’ a chain store). This only delays the opening of stores and increases cost.

• FDI limit should be further liberalised, which will ensure development of robust cold chain system, bets retailing practices and wide range of goods and services at competitive prices. It will also bring along with it increased focus on farmer education and training resulting into better crop/ yield management practices. 100% FDI in multi brand retailing must be allowed in certain areas such as electronics, automobiles, sports goods etc.