Apparel retailers expect a continuation in current tax benefits in the forthcoming Union Budget 2016-17 and are seeking additional reductions both in taxes directly related and not directly related to the industry.

“The expectation is to address the problems of the sector at large,” Arun Ganapathy, CFO of Spykar said. “It is imperative that the budget does not tax too much, and consumers are optimistic about the economy and ready to spend. We, being in the discretionary spend sector, will face headwinds in our growth journey, unless the cash position of the end-consumer improves.”

The retail sector is expected to grow at a rate of 12 to 13 per cent this year, he said. Any additional taxation will definitely impact this growth. Even if the players resort to price increases, the upward movement of the sector will be affected.

Ganapathy also hoped that the finance minister will lay a plan for the implementation of the Goods and Services Tax (GST).

On a similar note, Ranjiv Ramchandani, director and founder of Tantra T-shirt said, “Every budget, retail brands cross their fingers. The hope, as always, is that no new or additional taxes are levied and there is a resolution to VAT, so as to simplify all inter-state transactions.”

There should also be tax incentives and sops for retail start-ups like Tantra, as this will allow them to scale operations, improve profitability and offer greater footprint and employment to a larger section of the population, he added.