The Hindu Business Line : Extend tax benefits to contractors: Assocham

THE Associated Chambers of Commerce and Industry of India (Assocham) has advocated extending benefit of tax holiday under 80-IA to contractors engaged in the development of infrastructure facility under agreement with Government/statutory bodies. This, the Chamber says, would provide real impetus to infrastructure development.

In a note submitted to the Finance Ministry, the Chamber has stated that this is necessary because under the present provisions, if an entity enters into an agreement with the Government for development of infrastructure facility and transfers the facility to the Government after development on BOT (Build-Own-Transfer) basis, the profits from such development and transfer is eligible for tax holiday.

Whereas, on the other hand, the contractor who is directly awarded the contract for development of infrastructure facility on behalf of the Government on BT (Build-Transfer) basis, is not eligible for tax holiday in respect of the profits derived from such development.

Assocham has further stated that there is an urgent need to invest heavily in building up of a viable and efficient infrastructure in the agriculture sector in India. This would necessitate building up of proper computerised infrastructural facilities and electronic highways for procurement, dissemination of best agricultural practices, weather information, storage practices etc. as well as offering the best possible price to the farmers. Also, this would result in cutting down intermediaries/middlemen and thereby reduce the transaction costs.

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