ICCK

The technology sector, in a meeting with finance Minister Arun Jaitley on Saturday, asked for better taxation policies and norms this budget, in the software and hardware, including addressing the issue of credits related to the equalisation levy that has been a cause of concern for startups since it was announced in the last budget.

In the meeting the software services industry body ­ National Association of Software and Services Companies (Nasscom) and hardware industry body MAIT had a positive discussion with Jaitley.

“We had a good meeting where we brought out the concerns of IT industry and how the government can support the industry at a time when it is passing through a difficult time,“ said R Chandrashekhar, president of Nasscom.

The main areas Nasscom focused on are improving ease of doing business, increased incentives for R&D, issues surrounding GST and taxation issues that plague startups.

In order to encourage R&D and innovation, the industry has asked for the provisions existing in Income Tax Act to be made applicable to the IT industry as well.

Chandrashekhar further said that government should provide ease of doing business for startups and small and medium businesses.

“Currently safe harbor margins which allow companies to do away with taxes in case of uncertainties regarding taxation. But those margins are currently extremely high. We have suggested they be bro ught down to more realistic levels,“ he said.

Chandrashekhar reiterated the need to relook GST. “GST is a major concern for services sector and while it is good for the country as a whole, for intangible services like IT it is hugely problematic. Every issue relating to provision of service, valuation, tax intra company supplies are going to be major galleries. In face of global challenges will complicate life even more,“ he said.

Other suggestions include specifying the roadmap for reduction of corporate tax from 30% to 25%, addressing the anomaly that resident investors are taxed two times foreign investors and address the issue of carry forward losses benefit not being available if it is dilution of equity. It also asked for clarity on scope and coverage of transactions under equalisation levy, which is being passed on as a cost to customers and startups.

MAIT made four suggestions ­ extension of concessional duty benefits to all IT agreement goods; list of computer premise equipment such as wireless access points, USB adapters and wireless access controllers to be included under the excise duty concession scheme, or preferential rate of GST at 12%; harmonisation of IT product lists across central and state indirect tax jurisdictions and establishment of convergence cell to provide impetus for the ICT sector.

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