The Andhra Pradesh Government has asked the Union Finance Minister, Mr Pranab Mukherjee, to remove certain anomalies in Service Tax rules to ensure refunds to IT and IT-enabled services and financial services firms.

These refunds, which are pegged at Rs 250 crore, are due to 24 major firms such as WellsFargo, HSBC, Bank, Bank of America, United Bank of Switzerland, Deloitte, Hitachi, Mahindra Satyam, Convergys and Broadridge.

In a letter on Tuesday, Andhra Pradesh Minister for IT, Mr Ponnala Lakshmaiah, said that he had received representations from IT firms regarding anomalies in application of service tax rules, which resulted in delay in release of refunds.

While STPI (Software Technology Parks of India) allows IT, ITES firms to get exemption from customs and central excise duties on procurement of goods, separate order issued by the Centre allow them to get refund of Excise Duty and Service Tax that they pay on inputs and capital goods.

“The industry has represented that while their units located in Chennai, Pune, Mumbai and Delhi have been regularly getting refund (of service tax), their units located in Hyderabad are being denied. They said they are being forced to move to other locations because of this lacuna,” Mr Lakshmaiah said in the letter.

The Minister requested the Finance Minister to remove anomalies in rules and ensure uniformity.

> kurmanath@thehindu.co.in

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