Given the global uncertainty and fear of domestic economic slowdown, legal experts call for revival of one-time settlement scheme for all pending tax disputes to free-up locked capital for both the government and tax payers.
Demand for clarity on claiming credit under GST to bring down litigation and PLI to promote AI in different industries will be a game changer, say experts.
An tax expert said one of the biggest issues faced by businesses is the risk of litigation and also prolonged litigation which take years to resolve.
In line with Sabka Vishwas Scheme of 2019, a one-time settlement scheme under the Customs Act should be offered to ease the accumulating disputes, she said.
The scheme will also help monetise the blocked revenue involved in litigation. Further in order to provide tax certainty and a clearer framework on compliances and reducing the risk of litigation, the validity period for advance ruling may be extended to five years from the existing 3 years, she said.
Introduction of provisional refunds on inverted duty structure cases should be a welcome step especially by amendment of Section 54(6) of the CGST Act. The amendment would permit risk-based provisional refund sanction which would eventually speed up access to working capital, reduce prolonged refund delays and place the inverted duty refunds equal to zero-rated supplies, she added.
Another tax expert said the Budget should prioritise GST simplification by rationalising rates, pruning exemptions and issuing clear, binding clarifications to reduce interpretational ambiguity.
It should also address procedural bottlenecks in claiming input tax credit by easing documentation requirements, reducing dependency on supplier-side compliance and expediting refunds, he said.
Another tax expert said the government should focus on reduction in interpretational ambiguities, consolidation of compliances and fewer retrospective or frequent procedural changes.
Faster processing of refunds, relaxation of restrictive rules such as blocked credits and improved automated reconciliation mechanisms would significantly enhance cash flow and working capital efficiency for businesses, he said.
The Budget can leverage the PLI framework to actively promote adoption and indigenous development of emerging technologies like robotics, artificial intelligence, automation, and advanced manufacturing solutions, he said.
Introducing technology-specific PLIs, R&D-linked incentives, and benefits for Industry 4.0 adoption would help drive innovation, improve productivity and position India as a global hub for high-tech manufacturing, he said.
