Tax Concession Zones: There must be geographies earmarked where tax concessions can be offered in manufacturing zones, this may also involve state governments. Taxes must be applied to an organization as a certain reasonable percentage of the revenues they make.
For startups: a). There should be income tax benefits till a startup reaches a certain sustainable size and reasonable revenues. b). For an initial period of let us say 5 yrs or so, even if they are making profits, either total tax on profit or a part of it should be exempted. c). In setting up manufacturing units, Governments may allow them premises or land on lease for at least 5 – 6 years at easy interest rates or returnable clauses. Land can be given by Government, money can be deducted on an EMI basis, Infrastructure support like schools, dorms can be build in a public – private partnership.
Clarity on VAT / GST: a). The tax system should be streamlined where equitable tax implications are borne by all parties including manufacturers, dealers, facilitators (e-commerce sites etc) and consumers
b). Double taxation may be avoided once GST is firmed up. Instances like Karnataka Government imposing heavy taxes on Flipkart or Amazon needs immediate resolution and way forward.
Certifications on products sold on E-tailing sites: With Digital India as the larger theme, it is particularly important that for technology startups some clear roles are decided. There must be some sort of certifications made compulsory from gov ernment as a way to check the inventory status i.e. ‘as and what is’ must be shared with visitors on the site as there is no ‘touch and feel’ aspect. This will ensure the prospective buyers while browsing through information about when a certain product was manufactured, what is its quality, its condition etc. Something similar to what takes place in a consumer durable industry with BEE Ratings – products marked as A+. B++ etc. Specifications will help boosting sales and also avoid unwarranted litigations companies can avoid due to misleading information coming as complaints. These will put lesser pressure for startups in e-commerce industry to rain discounts and rather progress naturally in an organic way.
Incentivize to operate in low penetration areas: Low penetrated geographies i.e. where penetration level is less than double digit, tax benefits can be granted so that it is reflected in the prices and benefits are passed on to end customers by products becoming cheaper or more affordable. Privileges attached to an Aadhar card may also be merged into buying schemes of users in these lesser or non-penetrated markets. For brands that are not premium, this can help in their outreach and rural sales.