Nasscom welcomes the proposals related to IT-BPO in Indian Budget 2009-10
NASSCOM welcomes the Budget Proposals 2009-10 which recognizes the contribution of the IT-BPO industry to India’s economic progress and has provided the necessary measures to boost the sector.
Mr. Som Mittal, President, NASSCOM said, “The Finance Minister’s decision to extend fiscal benefits available to the industry under Section 10A/10B for an additional year will help the industry mitigate the impact of the current economic environment and retain its competitiveness.”
Mr. Pramod Bhasin, Chairman, NASSCOM said, “Many of the initiatives in this year’s budget recognize the role the IT BPO industry can play in promoting inclusive growth and creating substantial employment opportunities in the country. The industry will be keen to partner with the Government in expanding e-governance initiatives including modernization of employment exchanges, the UIAD project, and smart cards for healthcare services so as to achieve enhanced governance. Increased capital outlays on the education and infrastructure sector will also address growth challenges that the country has faced.”
The Budget proposals also address NASSCOM’s recommendations relating to multiplicity of taxes on packaged software, creating a dispute resolution mechanism on transfer pricing, abolishing FBT and issues on service tax refund. The combined effect of these proposals will facilitate the industry and its 2 million workforce to compete effectively and sustain India’s advantage. NASSCOM will continue to examine the fine print and seek clarifications as needed.
Key positives for the IT BPO industry
Extend deductions in respect of export profits under Section 10A/B of the Income Tax Act by one more year ie FY 2010-11.
Abolish Fringe Benefit Tax.
Alternative Dispute Resolution Mechanism for resolution of transfer pricing disputes and CBDT to formulate `safe harbour’ rules.
Exempt value attributable to the transfer of the right to use packaged software from excise duty and CVD.
Service tax refund mechanism based on self-certification or by a Chartered Accountant.
“Assessee” replaced by “undertaking” in Section 10AA (7) effective 1st April 2010.
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