IT
Scan
February
14 , 2003
NASSCOM urges removal of tax, procedural hurdles in
union budget 2003
NEW DELHI -- NASSCOM has announced its recommendations
for the union budget 2003 to the government of India.
The industry association has reiterated its demand
to retain the full tax exemption under section 10
A/10 B to the industry as committed by the government
and originally envisaged.
The
key recommendations include tax incentive under 10A
and 10B of the Income-Tax Act should continue till
2010, sub-sections 10A (9) and 10B (9) either be deleted
or amended to specifically exclude demergers and amalgamations,
and exemption of physical bonding of premises/equipment
by customs under the various export promotion schemes.
It advised the government to revamp the education
system and to give impetus to e-governance. It also
recommended the government to ensure that the compulsory
three percent of the government spending on IT is
not only in hardware, but also in software and services
in the proposed ratio of 40:30:30.
Presenting
the recommendations, Kiran Karnik, president, NASSCOM
said: "The outstanding success of the IT software
and service sector is an example of what government
support and government-industry partnership can do.
To build on this, the government should honour the
commitment of full exemption from taxes on export
profits till 2010, since investments and business
plans have been made on the basis of this commitment.
This is necessary as the global economic scenario
continues to be bleak and the industry is fighting
competition from emerging countries. We urge the government
not to be shortsighted, but look at the long-term
gains from this sunrise sector, which has consistently
contributed to the growth of the Indian economy.
"There
is also a need to make amendments in Section 10A/10B
of the Income-Tax Act, which is holding back acquisitions
and mergers. In addition, there is need to remove
other minor regulatory and procedural hurdles particularly
with regard to custom bonding which is hurting the
ease of transaction for the software services sector.
Import and re-export of equipment for embedded software
work is another area where we need customs to be far
more positive," he added.
NASSCOM
has also requested the government to pursue vigorously
the totalisation agreement with the US, and tax withholding
issue with Japan and other countries to help Indian
IT companies further their reach in these markets.
Some of the other recommendations presented by NASSCOM
include exemption in respect of export profits in
case of demerger and amalgamation, tax benefits to
supporting manufacturers, taxability of shrink-wrap
software, dividends from overseas subsidiaries and
self-declaration of Softex forms.
NASSCOM
has asked the government to encourage net-based transactions
and not impose new and unnecessary regulations, bureaucratic
procedures, or taxes and tariffs on commercial activities
that take place on Internet. It has also demanded
a tax moratorium on e-commerce at least for the next
five years.
Contact:
NASSCOM
Tel: +91-11-2301-0199
Fax: +91-11-2301-5452/2379-3936
Email: shivani@nasscom.org
Web: www.nasscom.org
