Budget reactions from Mr. Rohan Shah, Managing Partner, Economic Laws Practice

6th July 2009

Hi,

Please find pasted below Budget reactions from *Mr. Rohan Shah, Managing
Partner, Economic Laws Practice*.

Attached is his photograph.

Kindly carry.

Regards,

Vivek / Varsha

Paradigm Shift PR

Mumbai

Tel: 22813797 / 98

Cell: 9833115116 / 9821195211

*Profile of Mr. Rohan Shah:***

Mr. Shah is the Managing Partner of Economic Laws Practice and is based in
the firm's Mumbai Office. His areas of expertise include taxation, corporate
and commercial laws including real estate. Mr. Shah obtained an L.L.B. in
Mumbai and is a qualified Solicitor of England & Wales. Mr. Shah is
acknowledged in Chambers, the Legal 500 and International Tax Review as one
of India's Leading Tax and Commercial Lawyers

* *

*Budget Reactions:***

Budget 2009 was presented in the background of unprecedented over
expectation of the anticipated benefits that the Budget would offer to
various segments of the economy. Expectedly, Budget 2009 fell short of some
expectations. In reality it is not the budget which delivered low, it is the
industry whose expectations were unrealistically hyped. Viewed in the
context of the global economic environment, and, India's own internal
challenges Budget 2009 is adequate, even if it is short of being
outstanding.

From the standpoint of taxation, the Budget takes some definitive measures
which will have a deep and far reaching impact on the economy. Undisputedly,
the most far reaching tax measure is the time bound affirmation of the
introduction of GST from 1st April 2010. The scheduled introduction of GST,
poses in equal measures a challenge, both for the Government and the
industry. It should not be lost sight of that introduction of VAT, complex
and challenging though it was, covered only goods, while the introduction of
GST has twice the reach and complication of VAT, as it will cover both goods
and services. While, VAT covered less than 50% of our economic activity, GST
will ultimately embrace almost the entire spectrum of our economic
activities. The key challenges as we migrate to a GST are the following:

Formulation of a uniform Legislative architecture to support the dual levies
of Central GST and State GST

The formulation of a uniform revenue neutral rate

The formulation of exact provisions as to the taxing trigger for the levy of
GST – either the place of supply or the place of consumption.

Formulation of a comprehensive tax credit mechanism inter se between Central
and State GST

The blue print for GST is likely to be made public in August 2009 which
leaves a transition period of eight months. Globally, this period of
transition has been in excess of twelve months. There is a lot of running to
be done by Government and industry to get to the milestone of GST on 1st
April 2010. The only way that all concerned can win, is by industry and
Government running the course in unison as a relay, and, not as a race.

*Profile of ELP:***

ELP is a leading law firm that was founded in 2001 by lawyers from diverse
fields. The key practices of the firm are Tax, Litigation & dispute
resolution, WTO and International Trade, corporate and commercial, venture
Capital and Equity fund, Real Estate and construction, Media. ELP has
offices in Mumbai, New Delhi, Ahmedabad and Pune. The firm services clients
across India, the US, Europe, Middle East and the Far East. Supported by an
assembly of some of the best solicitors who have been in practice with
esteemed organizations for over 16 years, ELP has assisted several Fortune
500 companies, industries and associations and the Government of India in
wide-ranging matters from legal advisory to key business decisions.