COUNTDOWN TO BUDGET - IT industry eyes simplified & rationalized tax regime

— The Times of India

Through initiatives like Make in India, Digital India, Startup India and Smart Cities Mission, the Union government has already introduced considerable energy in different sectors. However, for better realisation of these projects, the government should usher in smoother tax regime in the Union Budget, said city-based IT industry heads.
“The government should look at simplifying the present tax regime. The time is ripe to do away with various taxes and replace the same with a single taxation policy. Also, special economic zones (SEZs) should be promoted,“ said Mritunjay Singh, executive director and chief operating officer (COO) of Persistent Systems.
Deepak Nathani, COO, Cybage, said, “The government's initiatives like Make in India, Digital India, Startup India, Smart Cities Mission among others will require creation of technological infrastructure and opportunities for development of digital eco-system for effective realisation. The IT sector is looking forward for a higher budgetary allocation for these initiatives. Improved internet connectivity and penetration into rural areas can increase productivity and fuel economic growth by furthering employment opportunities.“
“The budget should promote tax holidays for IT startups with research and development benefits to encourage innovations and newer technologies. Moreover, a clarity on sunset clause for SEZs is much awaited. While on the global front, the current government has done a remarkable job of promoting `Brand India', greater emphasis should be laid on improving infrastructure especially in tier I and II cities. Additionally, stricter pollution norms and greater incentives towards promoting green energy should be provided,“ Nathani added.
Ganesh Natarajan, vice chairman, Zensar Technologies, said the need for a conducive domestic environment is all the more critical today .
“Retrospective amendments and ambiguous provisions are a serious detriment and should be avoided. A clear roadmap for rationalization of corporate tax rate to 25%, abolishing minimum alternate tax (MAT) or rationalizing the rate to 13rd of the corporate tax rate and associated road map for utilizing MAT credit, rationalization of education cess and surcharge are some of the areas that should be looked into,“ Natarajan said.
R Chandrashekhar, president, National Association of Software and Services Companies (NASSCOM), said: “The government should commit towards offering a friction-less business environment and support to the IT-BPM industry , which is on the threshold of $100 billion exports this year. Also, the government should benchmark plans to phase out exemptions and introduce suitable measures to ensure India does not lose out in the global competitiveness.“
“While the Goods and Services Tax (GST) will hopefully address the issue of dual levies, there is a need for intervention even under the current regime,“ he added.