The Hindu Business Line : BPO tax issues remain unresolved: Nasscom

THE National Association of Software and Services Companies (Nasscom), while welcoming the exemption in excise duty on PCs, has expressed disappointment that issues related to taxation of the BPO industry have been left untouched by the Finance Minister.

"These are holding back more rapid growth and larger investment and employment in this industry. Also, a number of procedural issues continue to cloud the policy outlook in this industry,'' the Nasscom President, Mr Kiran Karnik said.

Mr S. Mahalingam, Tata Consultancy Services, said, "it was a very good thing that no benefits were taken away from the software industry. So there is continuity here.''

He added that he was looking for some announcements on higher education but found them missing in the Budget announcements. "Industries such as IT in India have made global impact only because of higher education.''

Mr B. Ramalinga Raju, Chairman, Satyam Computer Services, said, "we are quite pleased with the Budget focus on infrastructure development in the areas of power, civil aviation, local mass transportation and roads."

Industries providing IT training, optical fibre cables and Internet access seem to be affected, either positively or negatively, due to Budget announcements.

The two per cent cess meant to boost education in the country could spell opportunities for IT training companies.

Mr Pramod Khera, CEO, Aptech Ltd, says, "The cess will create a fund that can then be ploughed into education. To us, this is good since we are looking at Government projects."

Mr R. Ramaraj, Managing Director & CEO, Sify Ltd, said, "The increase in service tax from 8 per cent to 10 per cent, especially for the cyber cafe industry where even 8 per cent is counterproductive, is a retrograde step. Doing this, but not doing enough to bring down the prices of access devices like PCs will result in a decrease in the number of Internet users rather than encourage them."

Mr Deepak Chhabria, Managing Director, Finolex Cables Ltd, points out bringing down the duty for fibre optic cables to 0.6 per cent might not send the right signals across. "For the manufacture of fibre optic, other components such as polythene, nylon jelly etc. also go in but their duty structure continues at 20 per cent."

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