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Government Should Relax Rules For Angel Investments

While institutional investment and foreign investment is exempt, the hard earned, tax paid money from Indian angel fraternity invested into seed stage startup, is subject to tax again.
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Growth of rental industry is a boost to 'Make in India' campaign and also to help reduce imports especially of electronics and appliances. This is enabled through re-use of products and extending their life-cycle way beyond normal use. However, the Rental and Services industry which currently works with several small, offline players does need a GST exemption to promote the products. How can GST of 28% which is applicable on procurement of appliances be same as renting on them, especially since rental happens many times over on the same product? Similar is the case with laptops, desktops which attract a high rental GST of 18% same as procurement.

The government took an easier way by pegging Rental GST rates to procurement, it's time to relook at that, if we are to promote more sustainable way of economy. Similarly while other countries and investors are promoting Marketplace model, current proposals in India are pushing back on marketplace model, by making mandatory for listed vendors irrespective of their size (20 lakh) , hence discouraging them to list.

Moreover consumer preferences have shifted as they have realised that renting can accord them access to products that would otherwise be well out of their budget, insulate them from the liability of depreciation or damage, and at a convenience that would have been impossible before the disruptive impact of technology.



Last and not least, after so much feedback and requests across board for angel tax relaxing, I hope finally action is taken on the same. While institutional investment and foreign investment is exempt, the hard earned, tax paid money from Indian angel fraternity invested into seed stage startup, is subject to tax again. We need to seriously remove the same.

(Harsh Dhand is Co-Founder and CEO, Rentsher)

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.
 


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