Budget: IT,auto sectors want stimulus to continue

The IT and auto sectors in the city are pinning their hopes on Union Budget,to be presented on Friday,to continue the stimulus given to them to tide over the recessionary conditions last year.

The tax holiday enjoyed by the IT/ ITES companies under the Software Technology Park Scheme will end on March 31. Since these companies are already affected severely due to the US dollar depreciation,it will be difficult to sustain the operations if provision on tax holiday is withdrawn. Many small and mid-sized companies may not be in a position to relocate to SEZ due to exorbitant costs and this may result in closedown. As such,it is recommended that the tax holiday u/s 10A be extended by a term of five years,said a memorandum submitted by Mahratta Chamber of Commerce,Industries and Agriculture (MCCIA) to Finance Minister Pranab Mukherjee.

Rajeev Gupta,president,Fujitsu Consulting India Pvt. Ltd,said a definitive action towards a unified GST (Goods & Services Tax) regime,that can meet the requirements of the changing times and simplify administrative hassles in the current system,will be appreciated. The implementation of the GST regime is also expected to remove the anomalies on whether software is liable for VAT/Service Tax. Though the Direct Tax code implementation has been deferred,it has given hopes for a lenient and friendlier Income Tax structure for common man, he said.

Tushar Mehendale,managing director,ElectroMech,said there should be a clear roadmap for a single-tariff nationwide GST instead of different rates for GST and separate central GST and state GST. In all likelihood,India is going to miss the bus on the implementation of GST from April 1,2010. Hence,proper timeline needs to be frozen for implementation and rules to be formulated. Along with the implementation of GST,all local levies like Octroi and Entry Tax should be abolished forthright, he said.

The auto sector is hoping that the government would continue the export sops and extend the two per cent interest subsidy to exporters. Sops to encourage research and development in new technologies,like those for hybrid vehicles and low-emission vehicles,are other desired incentives that the auto sector is looking forward to.

The Cenvat rate for excise duty has already been raised by two per cent. It would not be wise to increase it any further. Also,the stimulus given to the auto industry last year should continue and tax benefits should be provided for interest paid on loans for purchase of motor vehicles, said the memorandum.

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auto
Budget
IT