Financial Daily from THE HINDU group of publications
Thursday, Feb 23, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 23, 2006 |
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Info-Tech
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Infrastructure Industry & Economy - Taxation Software parks seek parity with SEZs — `Extend tax sops beyond stipulated sunset clause of 2009' Moumita Bakshi Chatterjee
New Delhi , Feb. 22 SOFTWARE Technology Parks of India (STPI) has asked the Government to bring it on par with special economic zones (SEZs) by extending tax benefits allowed to units registered under it beyond the stipulated sunset clause of 2009. The move assumes significance as 4,000 software companies, including 3,000-3,500 small and medium companies, are currently registered under the STP scheme, contributing nearly 80-90 per cent of the overall software exports. "We have sought extension of benefits under the STP scheme beyond 2009. We have also said that the STP framework has been a successful scheme for software units, and can be used for effective implementation of SEZs," Mr B.V. Naidu, Director of STP Bangalore, told Business Line. At present, the units located under the STP scheme enjoy sops, including income-tax holiday as per section 10A of the Income Tax Act; 100 per cent customs duty exemption on imports of capital equipment; and import of equipment on a loan or lease basis. Among the other benefits are the import of all relevant equipment/goods (including second-hand equipment, except prohibited items); 100 per cent excise duty exemption on indigenous items procurement; and sales in the Domestic Tariff Area up to 50 per cent of the foreign exchange earned by the STP/Electronic Hardware Technology Park unit. Mr Kiran Karnik, President of National Association of Software and Service Companies (Nasscom), said the industry had already raised the issue with the Government on the grounds that SEZs are more beneficial to the manufacturing sector. Moreover, the STP scheme allows companies the flexibility of being physically located outside STP premises. "Small and medium software companies may not be able to afford the rentals in an SEZ, which are already moving upwards. We fear that the benefit of export, instead of going to small scale units, may go to developers," Mr Karnik said. Nasscom has urged the Government to recognise STPI as an SEZ for the existing units, saying that such a move would not only give fillip to smaller players, but also help sustain the growth in smaller cities and towns where STPs are currently operating.
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