DIRECT TAXES
| Nasscom to push for changes in DTC on SEZs Tue, 29 Jun 2010 14:04:23 GMT |
| The Economic Times Nasscom to push for changes in DTC on SEZs CHENNAI: Software lobby Nasscom will make a pitch to the government seeking continuity of tax benefits on SEZs in the Direct Taxes Code (DTC). It is scheduled to meet Government on Wednesday in this regard. The government had said in the DTC paper that while benefits would continue for existing units, it would be retired for units that came up after the DTC is implemented, in March 2011. Nasscom president Som Mittal who was in the city on Monday for an executive council meeting said that the SEZ policy should be continued to encourage the balanced regionaldevelopment. "The DTC just simplifies things and gives the world a message that India is a country easy to do business with. Our software exports are around $60 billion and we have scope to expand it further. SEZs are one way of encouraging exports," he added. He added, "We created SEZs just a few years back and the policy should have continuity .SEZ is a great way to encourage investment not only in tier 1 but also in tier 2 cities. It is important for the government to take long term view on SEZs and it should be provided in the DTC on a continued basis and not grand fathered." He also noted that Nasscom is already preparing a paper in this regard and will present its views to the government.At the same time, a section of the industry feels that this norm in the DTC might lead to companies setting up smaller offices closer to the city. It might also lead to small and medium enterprises looking at tier-II towns to set up offices, without being constrained by the scale that an SEZ requires. "The sizes of IT companies are large; so u can’t accommodate everyone is the city. It won’t change the nature of business but this will be a positive move for small and medium businesses," said Mindtree CEO Krishnakumar Natarajan. According to the revised DTC draft, which will replace the Income Tax Act of 1961 after approval by Parliament, the tax exemptions for the SEZs would be provided only for existing units and not new units. Units set up in Special Economic Zones (SEZs) get 100 per cent income tax exemption on export income for the first five years and 50 per cent for the next five years. They also get exemption on 50 per cent of the ploughed back export profit for the next five years after the first 10 years. |
Online Poll