In anticipation of the upcoming Union Budget 2024-25, slated for February 1, the Goa Chamber of Commerce and Industry (GCCI) is proactively recommending significant modifications to both direct and indirect tax structures. The pre-budget memorandum, submitted by Shrinivas Dempo, President, GCCI to Finance Minister Nirmala Sitharaman, outlines a series of proposals aimed at fostering a more balanced and business-friendly tax environment.
The memorandum puts forth suggestions for alterations in income tax rates, addressing both individual taxpayers and corporate entities. Specifically, GCCI proposes a uniform GST rate of 12% on hotel rooms, eliminating the current differentiation based on room prices. Currently, rooms priced up to Rs 27,500 per day incur a 12% GST, while those above Rs 7,500 per day face an 18% GST. Additionally, the memorandum suggests granting standalone restaurants the flexibility to choose between a 5% GST without Input Tax Credit (ITC) or a 12% GST with ITC benefits.
Recognising the challenges faced by the casino and gaming industry due to retrospective amendments in GST rates since 2017, the GCCI urges the government to refrain from implementing changes that have retrospective implications.
Dempo underscores the inadequacy of the present standard deduction under the new tax scheme, particularly in light of the escalating cost of living and inflation. To address this, the GCCI recommends increasing the deduction under Section 87A to Rs 7.5 lakh from the existing Rs 7 lakh, applicable to both the new and old tax regimes. Furthermore, the GCCI advocates raising the standard deduction under the new scheme to 25% of the salary, capped at Rs 2 lakh.
A pivotal aspect of the memorandum emphasises the need for reforms in both the direct and indirect tax systems. The GCCI draws attention to the intricate and multifaceted changes in sections related to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). In response, the GCCI proposes rationalising the entire TDS and TCS mechanism, consolidating these sections into broader categories to simplify compliance and enhance operational efficiency. These recommendations reflect the GCCI’s commitment to fostering a more transparent, streamlined, and business-friendly taxation framework in alignment with the evolving economic landscape.