Feb 22, 2013 07:34 PM IST | Source:

Budget 2013-14: NASSCOM wants R&D services to be eligible for SEZ benefits

NASSCOM has presented its annual Pre-Budget and Policy thrust recommendations to the Indian Government, an effort to present the IT-BPM industry‘s wish list for the year ahead.

NASSCOM has presented its annual Pre-Budget and Policy thrust recommendations to the Indian Government, an effort to present the IT-BPM industry’s wish list for the year ahead.

In this list, NASSCOM has focused on issues related to enabling entrepreneurship, enhancing the global competitiveness of the IT-BPM industry, helping India emerge as an innovation hub and meeting growth and development goals.

As a part of its suggestions for enabling entrepreneurship, NASSCOM has stated that:

  • The compliance burden be eased through the removal of unfair levies
  • Royalty on internet downloads, which will act as a barrier to usage, be removed retrospectively
  • There is relief from expense disallowance for non-deduction of TDS, and other measures related to uplifting of the TDS burden
  • Procedural simplifications, such as an automated facility to check PAN, etc., be introduced

In order to improve the competitiveness of the IT-BPM sector, NASSCOM has advised the government to make available promised benefits by streamlining administration. It has stated that:

  • Income tax paid towards local tax obligations overseas be offset
  • R&D services be made eligible for SEZ benefits
  • Deduction for training be extended
  • Transfer pricing guidelines be rationalised and their domestic threshold enhanced
  • The SEZ policy be revamped, with no minimum, contiguous land requirement

To help India emerge as an innovation hub, NASSCOM has suggested that:

  • There be a re-classification of R&D and testing services as exports
  • The IT sector be allowed to avail existing R&D promotion schemes and that the benefit of the current DSIR scheme be expanded to include computer software
  • A tailored incentive model be developed for R&D in the IT-BPM sector, extending it to products and services

Finally, NASSCOM has recommended that the government meet development goals by introducing policies and allocations that increase ICT-led interventions in healthcare, education and governance.

It has suggested that India be built into a cyber secure nation through budget allocations and training of cyber security professionals and that Tier II and III locations be promoted for inclusive growth.

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