Story Pre-Budget 2019 – Expectations from Crayon

While the overall intention of the Government is in the right direction, it needs to take strong steps in reducing the bureaucracy and make life simpler and easier for doing business.

Paying TDS on 7^th of the next month means paying this out of your own pocket as the sales proceeds are not received by then.  This causes a huge cash flow issue to businesses – especially those in the trading business and those with very low margins.  Ideally this due date should be shifted to the end of the next month to ease out the cash flow pressures on businesses – say 26-27^th of the month.  Not to mention GST payments as well.

Also would need more clarity on notifications issued earlier – especially considering the changes in business models – due to which earlier notifications are no longer relevant and have lost the very purpose for which they were issued.  A classic example is NOTIFICATION No. 21/2012 [F. No. 142/10/2012-SO(TPL)] S. O. 1323(E), DATED 13-6-2012.

Government had provided for non-deduction of withholding tax on reselling of software licenses – primarily considering the very low margins in this trade and the fact that resellers are not making any changes to the licenses purchased from the OEMs.  With the changes in technology – pure play software licenses are being replaced by a bundled package – Azure, Amazon web services, etc. (Together referred to as “Cloud Services”).  However, the concept largely remains the same – Resellers are not making any changes to these bundled packages and the margins are also very low.  Would urge the Government to come out with specific notification to extend the scope of the term “Software” as defined under NOTIFICATION No. 21/2012 [F. No. 142/10/2012-SO(TPL)] S. O. 1323(E), DATED 13-6-2012.