Budget 2012 pretty much ignored the IT sector. But this year, the sector hopes things will be different. The Rangachary Committee's recommendations batting for a similar tax structure for the sector are awaiting government approval. So for Budget 2013, the IT industry's wish list is simple, reports Kritika Saxena of CNBC-TV18.
Som Mittal, president, Nasscom, says that this will be a growth oriented Budget; it will be a Budget which will re-instill business confidence.
Azim Premji, chairman, Wipro, says that the finance minister seems to be taken a lot of interim steps and we think he will take more.
Vikram Talwar, chairman, EXL Services, says that it has to be a business friendly Budget.
The Budget wish list submitted by the IT industry body Nasscom reflects these views and ask for two things: measures to boost growth and attract investors. Specifically, the list asks for: an entrepreneurship mission to allow smaller companies to grow. Measures to promote R&D for the IT sector nut more importantly, the needs of the hour are:
"Special Economic Zones are extremely important to promote exports as you know the IT industry is at 60-70% value add in exports and given our current account deficit it's very important to promote exports and SEZs will play a very significant role," says Mittal.
"As an industry I think our biggest are in the area of infrastructure, both in terms of infrastructure where we have to operate, which is power, which is transportation which is education I think education is a very important part of our industry. The focus on education needs to be greater a large part of our work force," says Talwar.
Industry also wants the government to give the go-ahead to several recommendations of the Rangachary Panel, which it says are crucial for growth.
The Rangachary Panel was constituted by the Prime Minster to review taxation of development centers and Information technology in India. It had made various recommendations on issues related to MAT, and taxing services exports.
Now the government has cleared the recommendation related to taxing export services... but it is yet to act on other more important recommendations... especially those relating to transfer pricing and safe harbour provisions.
The IT sector wants the government to move quickly on these areas.
Krishna Kumar, CMD, Mindtree, says that there is one issue on the transfer price where broad guidelines have been talked about. That is one thing which I expect the Budget would sort of clarify how really the whole system which is there to run the transfer pricing objective will get implemented so that we can continue to run the business rather than getting into any limitative sort of action with the bureaucracy.
"I think the comprehensive Rangachary report recommendations should be implemented completely. That is very positive for the IT industry because it has cleared the air viz-a-viz lot of interpretations which tax authorities were taking and unnecessarily blocking a lot of money in terms of payments in advance and then the refunds taking a long time to come back or getting appropriated against future assessments," says Premji.
Apart from this, the IT sector is also asking for concessions for small and medium companies simpler tax structure for angel investors, policies to help develop infrastructure in tier-II and tier-III cities.