Owners of small businesses have demanded imposition of a special tax of five percent on online retailers and lowering of income tax rate to 22 percent on partnership and LLP firms in the next Union budget to help them survive, a traders’ body said on Tuesday. Traders and retailers, who have been going through a tough time in the wake of the COVID-19 pandemic, contribute about 22 percent to the country’s GDP and provides employment to lakhs of people, Federation of All India Vyapar Mandal (FAIVM) claimed in its budget proposal to the Union Finance Minister Nirmala Sitharaman.

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”The traders’ community of India has been in a miserable condition after the demonetisation and the complex GST system were implemented. The growing e-commerce business has further raised the question of the survival of nation’s brick and mortar trade. So it is very important to impose a special tax of five percent on the total business of online retailers,” FAIVM general secretary V K Bansal said.

The traders’ body also claimed that the online retailers have experienced a surge in their revenue and reported sales of USD 4.1 billion in the week of October 2020 during the festive season.

”An income tax on partnership firms and limited liability partnership entities should be levied at 22 percent, instead of 30 percent at present. This will bring it at par with income tax applicable to corporate,” he said. The FAIVM has also requested the government to offer an interest subvention scheme for loans being provided to traders so that they can continue their businesses under the present circumstances.

Service sector retail businesses should also be given all benefits which are being extended to MSMEs, including the issuance of Udhyog Adhaar.

First Published:Jan 5, 2021 4:07 PM IST