IT Industry Extends Wish-list to FM
The leaders of Indian IT industry met finance minister, Pranab Mukherjee to discuss and highlight some of the pressing issues in the pre-budget consultations. Among others, the issues include extension of STPI and tax benefits to SMEs.
As the budgetary process for the current fiscal is underway, the leaders of Indian IT industry met finance minister, Pranab Mukherjee, to discuss key issues. The representatives from large IT companies, including Wipro, Infosys, IBM, TCS and HCL as well as Nasscom and MAIT officials set forth various demands that include extension of the Software Technology Parks of India (STPI) scheme, flexibility in service tax on software and enforcement of SEZ for industry benefits.
The representatives also raised concern for income tax relaxation to SMEs. The government has earlier decided to remove anomaly with regard to language of Section 10 (AA) of Income Tax Act that could allow the IT industry to derive tax benefits for units set up under the SEZ scheme. The STPI scheme was initially ended in March 2009 but has got one-year extension.
Among other issues that representatives highlighted include government intervention in the matters pertaining to US market, service tax on software and FBT. The discussions also brought notice to a circumstance that makes confusion on the treatment of software. The doubt is whether packaged software is a service, liable to service tax, or VAT.
Nasscom chairman, Pramod Bhasin said that IT-BPO has a major role in the economic development of the country, and it creates immense job opportunities.
Broadband connectivity and computers is the strategic differentiator for any economy, therefore it is essential to roll out mission mode IT projects in sectors such as e-governance, education, telemedicine and SMEs as well as for rural India, said Vinnie Mehta, exective director, MAIT. 4 percent special additional duty (SAD) should be abolished on all IT products and components, Mehta said.
Our demands include the extension of STPI similar to the SEZ scheme, and need for the government to government dialogue on trade agreements that India has earlier signed, said Som Mittal, president, Nasscom.
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