BANGALORE: India's technology industry stands to get a revenue boost from recent amendments made to the Special Economic Zone (SEZ) policy, which includes simplifying tax norms and rules related to land acquisition, software industry body Nasscom president Som Mittal said.
In an exclusive interaction with ET, Mittal said easing of rules related to land acquisition will attract more investments and increase export revenues from the software industry. Among other things, the Indian government had recently reduced the minimum land requirement for IT SEZ's, of which India's software companies are a part, from 100 hectares to 50 hectares.
"Companies were made to go through a complex process earlier, but now the government is taking up each of these issues. We welcome these amendments as it would bring in greater transparency," Mittal said.
Earlier this week, India's income tax department had eased transfer pricing rules for multinational corporations with research and development bases in the country, a move that industry observers say will encourage companies such as GE, IBM, HP, Microsoft etc to bring more work to India. Other amendments include possibility of a consolidated filing for multiple
SEZ units with a common service tax registration and easing of rules related to tax refunds. The new provisions would also enable at least 80% of services used by SEZs to be exempt from imposition of service tax.
Exports from the SEZs increased from Rs.3,64,477.73 crore in 2011-12 to Rs.4,76,159 crore in 2012-13, registering a growth of 31%, according to latest government data.
Once considered an investment hub, growth from SEZ's had hit a rough patch recently due to convoluted tax rules and absence of tax holidays. Interestingly, the latest amendments come at a time when the Indian IT industry is facing slow growth, reduced client spending and issues related to immigration in major markets such as the United States, Canada and Australia.
Mittal said the Canadian government had last week held consultations with a Nasscom delegation on various issues, including the country's Temporary Foreigner Visa Program that was amended in June. "We have been assured of an appropriate outcome. Even in the US, we are hopeful that the House of Representatives will come out with a more favourable version of the immigration bill," he said.
Source : economictimes.indiatimes.com