Budget 2012: Government could create Retail Entertainment Zones, says FICCI

Retailers in REZ should get benefits like exemption from stamp duty, octroi, and cheaper power.

By Agencies | Updated: Feb 18, 2012, 06.07 PM IST

NEW DELHI: A Retail Policy should be considered for promulgation by the government which will help modern retailing grow from strength to strength in India. An empowered committee under the Minister may guide and supervise implementation of the Retail Policy and take appropriate decisions. The empowered committee should have representatives from industry bodies such as FICCI, CII, RAI etc and retail industry as well.

In order to augment the living standards of people in the city, the government could look at creating Retail and Entertainment Zones (REZ) similar to SEZ and IT parks. Retailers in REZ should get benefits like exemption from stamp duty, octroi, and cheaper power.

In order to enable mergers and amalgamations in loss making retail companies, so that the amalgamated entity is able to carry forward the predecessor losses, section 72A of the Income Tax Act 1961, should be extended to retail companies, as currently the retail companies do not come under the definition of industrial undertaking, which is one of the mandatory conditions for carrying forward of losses under section 72A for any M&A.

Currently 200% weighted deduction is permissible for in-house approved R&D under section 35 (2AB), however the same is restricted to manufacturing organization. Retail is not considered as manufacturing, however retail companies also incur substantial R&D expenditure, which is very much required for growth and survival of the industry. Hence this benefit should be extended to retail companies.

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