Reaction Quote Pre Budget 2024-25

Jaipur, January 31, 2024.

Amit Mohan, President – Logistics & Infrastructure, Kotak Mahindra Bank“The upcoming Union Budget can be a directional budget for many core areas even though it is a “vote on account” before the general elections. The government is expected to ensure continuity in policies and investment in strategic areas to spur the domestic demand while managing the inflation. The focus is likely to be on infrastructure, healthcare and green and sustainable energy. The government may continue to take concrete steps towards an integrated logistics and infrastructure model while the digital infra can get a boost to unlock the true potential of a connected nation. Fiscal consolidation will be a priority given the flexibility and buoyancy provided by the high tax collections and the 7.6% GDP growth last quarter,”

Mr. Hitesh Garg, Vice President, and India Managing Director, NXP Semiconductors on the budget expectations, stating, “As we approach Union Budget 2024, the semiconductor industry in India is all set for a significant boost. Programs like PLI and DLI, especially in supporting Global MNCs, are set to spark innovation on a global scale. The rapid formation of the Indian Semiconductor Research Consortium (ISRC) further indicates a commitment to progressive research. Our pre-budget forecast emphasizes on joint funding and collaboration with technology leaders, which can be seen as a smart move to establish India as the world’s semiconductor hub. The key proposals include the exemption from customs duty for electronic transmissions and a uniform tax policy that fosters favorable business conditions by promoting smooth cross-border data flow. The focus on fostering start-ups and creating jobs in the semiconductor industry also brings out India’s stride towards becoming a center for advanced technological prowess, ensuring a resilient semiconductor ecosystem.”

Payal Thaker, Partner, Indirect Tax, BDO India, expressed her expectations for the gaming sector in the upcoming budget, stating, “Upto 1st October 2023, the gaming companies were paying 18% GST on the platform fee for games of skill, as against the Government’s contention of applicability of tax @ 28% on the entire bet value. While the matter is in the Supreme Court, considering that this is an industry wide issue involving significant legal complexity and threatens the very survival of all the gaming companies, with demands running into thousands of crores (and more than the revenues earned by these companies), the industry would hope that the Apex Court rules in its favour, despite the Government’s stand to the contrary.However, the current GST regime for the online gaming industry i.e. the GST applicability @ 28% on the amount deposited by the player (including bet value as well as the game playing fee) without any distinction between a game of skill and a game of chance needs to be relooked at since some online gaming companies have been forced to close down their operations in India due to the steep tax regime, with tax incidence in excess of the revenue earned by the companies. Considering the growth potential of this industry, a favourable tax regime would give it a significant boost and hence, merits a re- engagement between the Industry and the Government as proposed by the GST Council with the benefit of comparative data.”