The Hindu Business Line : ESC calls for extension of tax holiday benefits

New Delhi, Sept. 8 The Electronics and Computer Software Export Promotion Council (ESC) has urged the Government to extend the tax holiday under Section 10A and 10 B of the Income-Tax Law beyond early 2009, which is when the sunset clause for these provisions is triggered.

The roll over of benefits under these two provisions was critical to ensure continued dynamism in the IT/ITES sector, the ESC has said. “Tax benefits under Section 10A and 10 B are helping the Indian software and services firms in achieving competitive edge. Withdrawal of these benefits would adversely affect the head start advantage of the Indian firms, especially the small and medium enterprises,” Mr Sanjiv Narayan, ESC Chairman, told reporters.

He said the Government must extend the benefits under the scheme well in advance as it was an important determinant of future investments in IT/ITES sector, both by Indian companies and foreign companies.

Once these sections are hit by the sunset clause, the Indian IT/ITES exporters have to migrate to special economic zones. This is a costly proposition that the SMEs cannot afford, he said.

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