Dr. N.R. Parasuraman addressed the gathering regarding Indian Economy and Budget 2020. He began his speech by stating that India was the only country which exaggerated the importance of a budget. Over the years, budget speech is where incentives are being announced. He went on to define budget from academic angle as a strategic document which is planned for long term. Economic Survey on the other hand, is done to identify sectors which are sluggish and is used to plan on strategies to improve their growth. In terms of managing resources alone, Dr. N.R. Parasuraman stated that Finance Minister had done a great job. His criticism towards the budget was that it was a Drifting budget as opposed to a Doing budget.
Mr. S. Ranganathan agreed with Dr. N.R. Parasuraman with respect to the budget being long term. He then went on to compare growth rates of various sectors in India. Mr. S. Ranganathan expressed his doubts over the benefits of Dividend Distribution Tax (DDT) for Indian investors and expressed his opinion that the taxation reform is aimed at standardisation (a paradigm shift) to reduce dependency on deductions/exemptions and simplifying the taxation process. He also expressed his concern that the government had not done anything to address the demand that is currently going down. He appreciated the fact that the budget was planned long term with a focus on improving education and Infrastructure.
Mr. Amit Kumar appreciated government’s Fiscal Deficit target of 3.8 in this year and 3.5 in the coming year. He also expressed his appreciation towards government’s move to support entrepreneurs. He also urged the audience to get on with becoming entrepreneurs if they had any idea of becoming one as this was the right time to begin. Speaking about divestments he expressed that it was important to know where the money would come from. He mentioned that he himself worked in the power sector and that there was currently no money in power sector. Speaking about the impact of budget on Mysuru, he stated that as government is focusing more on education, education systems should gear up to acquire more students from outside India. He stated that Mysore also will be benefited with budget’s allocation to tourism. He concluded by stating that India would be 10 Trillion-dollar Economy in 10 years if it maintains a growth rate of about 7.4%.
Mr. Bhaskar Kalale began his speech with humour by stating that a few days leading up to budget announcement and a few days after the announcement, 90% of the adults in India will become Financial Gurus. He also mentioned that budget was a strategic plan of where government or Indian Economy needs to be taken to. He appreciated governments effort in budget to make structural changes. He then stated that in a country like India where population is growing, Infrastructure becomes really important. He sided with the government’s claim to achieve 5 Trillion-dollar economy by 2024 and to double farmers income by 2022.
He expressed his appreciation to government’s focus on start-ups and technology. He then pointed out that 17% of government’s revenue was from Income tax and 18% of government’s expenditure was the Interest paid.
Highlights of budget 2020 were then presented by students of SDMIMD.
Following the highlights, Mr. Sharath Rao began his speech by telling a story about scarcity mentality. He stated that Indians had this scarcity mentality and that we’ll have to move towards abundance mentality. Further, he discussed about key budget announcements, changes in FDI, relaxation in debt of securities law and insolvency for financial service providers.
He then went on to discuss about Corporate taxation. Under corporate taxation he briefly explained LLP and abolition of DDT. Speaking about abolition of DDT, he explained insertion of taxpayer’s charter in the act which is aimed to build trust between taxpayer’s charter and tax administration. Later, he addressed the crowd regarding various incentives that were given to the start-ups, affordable housing sector and investments by sovereign wealth funds.
He then briefly explained loopholes of Double Tax Treaty and how it can be addressed with Multilateral instrument. Further, talking about withholding tax provisions, he stated that going forward Amazon and other e-commerce sites will be charged 1% TDS, when they pay the seller or vendor. He then talked briefly about background and proposed amendment for exemption for a non-resident from filing an income tax return, reduced rate of tax withholding on fees for technical services and provision for e-appeal and e-penalty. He concluded his talk by briefly explain the proposed dispute resolution scheme.
Talking about individual taxation, Mr. Suresh compared the existing system to a food buffet and the new reforms to “pay for what you eat”. He compared the simplified taxation policy with the traditional policy in depth on various aspects such as tax deductions, ease of employees and employers (need of procedural education and related issues), retiral benefits, losses with respect to house property, etc.
He also talked about the revenue alignment mechanism for the same. He further went on to talk about the reforms made for the provision for ‘not ordinary citizen’ for individual taxation. He also opined that start-ups do not usually make the option of employee stock available for its employees while commenting about the taxation implications for the same.
Mr. K. Baskar remarked that he wasn’t disappointed with the budget as he had no expectations. He then went on to talk about custom changes. He opined that the theme of budget is two folded; one to protect the domestic industry and the other to change the rules of free trade agreements. He stated that government has to give importance to crowd sourcing ideas.
He then talked about CII’s perspective for revamping customs laws for reviewing and abolishing the unnecessary ones. He expressed disappointment over the increased customs duty for medical equipment import, said it’s counterproductive towards Ayushman Bharat initiative.
He went on to opine that electronic invoice validation at the GST portal would help avoid fake invoices and related malpractices by rationalising and increasing the collections for the government. He the talked about the need of incentivising the exporters without breaching the agreement with WTO about the same. He also expressed remarks over the input tax credit and GST amendments.
Mr. Ganesh Krishnamurthy addressed the crowd regarding Transfer pricing. Transfer pricing is the transaction between two countries. Some of the changes that were made with respect to transfer pricing were bringing the due date of accountant’s report forward, APA provisions to cover determination of project attributes to a PE and safer harbour rules to cover determination of profit attributes to a PE. At this point Mr. Ganesh Krishnamurthy concluded his talk in the interest of time.