Left Menu
Development News Edition

Nasscom seeks new tax-friendly SEZ policy beyond 2020

PTI | New Delhi | Updated: 14-06-2019 19:18 IST | Created: 14-06-2019 19:18 IST
Nasscom seeks new tax-friendly SEZ policy beyond 2020
Image Credit: Flickr

IT body Nasscom has urged the government to continue the tax incentives to units in special economic zones beyond March 2020, saying that such a move will provide industry with certainty and enable them to invest in long-term strategy. Nasscom, in its pre-Budget recommendations submitted earlier this week, said IT-BPM industry contributes 6.6 per cent to the country's GDP, directly employs over 4.1 million skilled workforce and annually earns over USD 130 billion in foreign exchange.

"It would be useful to build on this strength by laying out a Special Economic Zones (SEZ) policy keeping the next 20 years in perspective. This would provide industry with certainty and enable them to invest in a long-term strategy," Nasscom Senior Director and Public Policy Head Ashish Aggarwal told PTI. He said Nasscom has suggested that the new tax-friendly SEZ policy should retain existing tax benefits and provide concessional rate of 9 per cent Minimum Alternative Tax (MAT).

Also, there should be exemption from dividend distribution tax (DDT). This would help in achieving the USD 5 trillion GDP milestone by 2024. "A new SEZ policy, on the proposed lines, would help generate further employment and increase earnings in foreign exchange. Such a policy would be a net contributor to the Budget kitty and contribute to inclusive growth through economic growth in tier II cities," Aggarwal said adding that retaining the existing SEZ benefits will not result in any additional financial burden.

He pointed out that growth of the sector was affected when MAT and DDT benefits were withdrawn from SEZs in 2011. "In the subsequent years, exports growth declined significantly to low single-digit rates, including negative growth in a year. Recently, the growth has again shown a promise to pick up...It is important that the hard earned gains are not lost, again," Aggarwal added.

He also pointed out that other countries provide significant tax incentives for exports and it is, therefore, important that India's SEZ policy is as attractive, if not more. Citing China, he said that the country offers an incentivised tax rate of 15 per cent to companies in its specified zones. Moreover, Indonesia, Mexico and South Korea offer reduction of up to 100 per cent in income tax rate to companies in special zones.

Nasscom has also urged the government to incentivise R&D for IT companies to support development of more technologies and patent creation as well as provide an initial budget for co-funding talent development and re-skilling in IT services. Besides, the industry body has suggested that long term capital gains arising from sale of shares of unlisted companies should be exempt from tax to encourage investment in startups, and that startups and small and medium enterprises with a turnover of less than Rs 50 crore be exempt from MAT.

It has also urged the government to introduce a point-based reward system for E-waste Recycling Credits for formal organizations to encourage them to channel their e-waste through government-approved recycling centres. Nasscom has also pitched for providing co-funding incentives to metropolitan city governments to set up new recycling units through public-private partnerships with large e-waste companies.


TRENDING

OPINION / BLOG / INTERVIEW

Why COVID-19 is unstoppable in USA despite it being ranked at the top of GHS Index?

Several worst-hit countries such as Italy, France, Spain, the UK, Canada, and Russia have peaked COVID-19 cases in April. Almost all of them have gradually flattened the curve. However, the USA is setting new daily records of infections tha...

COVID-19 seems cooking biggest ever global scam

The increasing number of corruption cases on COVID-19 funds from throughout the world and involvement of high profile persons indicate that the countries cant ignore corruption in their pandemic response programs. This has generated the nee...

Health Management Information Systems lack holistic, integrated, and pandemic resilient character

Being a part of the United Nations system, the World Health Organization WHO deserves its share of rebuke for its alleged failure issue COVID-19 health emergency alerts on appropriate time. However, the pandemic has also exposed loopholes i...

Pride in the time of coronavirus: a welcome move online?

This year is different in many ways not least as celebrations are also taking place against the dramatic backdrop of a global health crisis and a resurgence in grassroots activism following the death of George Floyd in Minneapolis. ...

Videos

Latest News

French coronavirus death toll rises above 30,000

France on Friday became the sixth country to report a death toll of more than 30,000 from coronavirus infection. The health ministry said in a statement that 25 people had died from coronavirus infection in the past 24 hours, boosting the c...

Experts decry proposed 14th amendment in so-called AJK Interim Act 1974 by Pakistan

Political activists and experts have condemned the proposed 14th amendment Bill to the 1974 Interim Constitution of so-called Azad JK as it further restricts the freedom of expression and opinion among the people in the occupied territory. ...

Amazon.com bans TikTok from employees' phones, cites 'security' -memo

Amazon.com Inc has requested employees remove the TikTok video sharing app from their mobile devices by July 10 over security risks, according to a memo to employees seen by Reuters. Due to security risk, the TikTok app is no longer permitt...

Cricket-Brathwaite, Dowrich half-centuries put Windies in control v England

West Indies hold a commanding 99-run lead over England at the end of the third day of the first test on Friday after posting 318 in their first innings at the Ageas Bowl in Southampton.In response, England openers Dom Sibley and Rory Burns ...

Give Feedback