IT industry seeks MAT reduction to 5% in Union Budget
Quotes
 

 

HomeNewsBudget ImpactExclusiveTaxRail Budget Celeb Speak Eco Survey
 

IT industry seeks MAT reduction to 5% in Union Budget

Last Updated: Monday, February 25, 2013, 16:40
 
 Comment 0
 
Hyderabad: The IT and IT-enabled services industry here has sought the reduction in minimum alternate tax (MAT) to 5 percent in the Budget 2013-14 for all IT companies operating in SEZs.

The Finance Minister is slated to announce on Thursday the budget proposals for the next fiscal.

"With the introduction of MAT for SEZ units, it has become very difficult for the IT companies in India (specifically for SME) sector to operate competitively and in a profitable manner," ITsAP (the IT and ITES Industry Association of AP) said in a statement.

"This has reduced the employment generation rate and further FDI investment in India. Hence the MAT should be rolled back or decreased to 5 percent," it said.

Under the present IT laws, business losses can be forwarded only for a minimum of 10 years and the same should be allowed to carry forward without any limitation.

In the current economic downturn globally, recouping the losses in 10 years may not be possible and many countries are allowing losses without any limitation to period, the IT body requested.

ITsAP also requested the FM to give an opportunity to set -off the taxes payable against refund due to the assessee which will increase the liquidity and save time in following up for the refunds.

On Service Tax issues, the ITsAP said all export companies in IT/ITES are entitled for refund paid on the input services.

"However, the same is not a reality as of today barring a very few cases. A series of meetings with Nasscom and other agencies with the Central Excise and Service Tax officers is not improving the refund process. Further, many small companies are not applying for the refund considering the hassles being created in the chain of refund claim," the industry body said.

BVR Mohan Reddy, Founder and Chairman of Infotech Enterprises Ltd, said for the software industry, withdrawing the MAT on SEZs, initiating a new SEZ policy to further improve IT exports, implementing a policy for R&D in software industry and promoting Tier II/III towns for inclusive growth will help accelerate growth in the software industry (IT Industry).

As SME sector is the backbone for the industry and employs 59 million people, it can be a growth driver for future. And hence a special package for the SME sector will help sustainable growth, Reddy said.

The tax on SEZ was introduced in the Union Budget 2011-12. The SEZ players said the benefits offered in the SEZ Act 2005, provided a wide range of incentives to investors in SEZs including exemption from MAT and 100 percent income tax exemption on export income.

According to a recent survey by research firm Ipsos, companies attributed exemption from tax as the key reason for investment in SEZs, which stood nullified with the imposition of the MAT.

PTI

First Published: Monday, February 25, 2013, 16:40

Comments


Post your Comments

Name
Place :
Email :  
Comments :  
 
Other Stories
MSME Sector

P Chidambaram proposed continuing non-tax benefits to these units for three years.

Full Article »

IT-BPO Sector

Clarity on tax issues related to R&D centres in IT soon.

Full Article »

Infrastructure

Big push to infra with Rs 50k cr tax-free bonds, two new ports.

Full Article »

Real Estate Sector

FM raised tax deduction limit by Rs 1 lakh for the first time home buyers.

Full Article »

Auto Sector

Excise duty on SUV will be raised to 30 percent from 27 percent.

Full Article »

More »

Latest Videos
Budget 2013: Tax slab remain unchanged Budget 2013: PM commends Chidambaram's budget Union Budget 2013: Chidambaram's Budget speech
Budget 2013: Tax slab remain unchanged Budget 2013: PM commends Chidambaram's budget Union Budget 2013: Chidambaram's Budget speech
rail budget
Rail Minister announced no hike in passenger fares.
know your fm
P Chidambaram- Man of all seasons.
Opinion Poll
How would you see Budget 2013 as?
Pragmatic
Populist
Non-event
 
 
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved