|
Moneycontrol » News » Budget Sector Comment
Tax holidays for IT cos: Fresh thinking required, says BMRPublished on Wed, Jul 01, 2009 at 16:52 | Source : CNBC-TV18 Updated at Fri, Jul 03, 2009 at 08:43
Abhishek Goenka, Partner and Leader of the real estate and IT practice, BMR Advisors.
There are no easy answers. It is also important to understand the rationale for the tax holidays. In the current scheme, both for STPs and SEZs, the stated law makes it explicit that the tax holiday is only on exports. Yet not so long ago, when the tax holiday for exporters outside of STPs and SEZs was phased out, the outrage was short-lived and the lobbying for its restoration was not half as noisy as it was for the IT industry. Therefore, the fundamental question arises is: is it the IT sector that should be given tax incentives or are exporters to be incentivized? To my mind, it has to be the former if there is to be any credibility in the demand. That said, is the end of the income tax holiday really the bugbear for the sector? There are several more critical and economically more impacting issues that the industry faces. It is no secret that almost all large global companies with IT operations in The story with service tax is no different either. With almost all services under the net, IT companies pay large amounts of service tax, which is supposed to be refunded to those that export. Yet, despite several promises, these claims are locked up in needless delays and litigation. Any prudent businessman would prefer certainty of tax costs, rather than an environment where there are incentives on the one hand, and multiple claims and litigation on the other. It's time the debate changed its focus to achieving this simplicity and certainty. (Abhishek Goenka is Partner and Leader of the real estate and IT practice in BMR Advisors. The views are personal.)
Entities: Income Tax
More on Moneycontrol
Headlines
06:15 PM
07:47 PM
08:36 PM
Video of the day
Trending NewsBusiness News
|
NewsVideos
Interviews
![]() Feb 10 2012, 15:43 | Source: CNBC-TV18 ![]() Feb 10 2012, 15:35 | Source: CNBC-TV18 ![]() Subscribe to Moneycontrol Newsletters |
|||||||