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The National Association of Software and Services Companies (Nasscom) has called for the creation of a level playing field for start-ups and smaller companies. A collaborative model may be the best solution as the country takes on a transformative path.
“For start-ups to participate in large government projects, streamlining of the procurement process is required. The country needs to do away with the stringent eligibility criteria that prevent them from being of the Digital India dream,” said Nasscom President R Chandrashekhar.
Second-largest hub With a total of about 15,000 start-ups and SMEs, India is the second-largest hub globally, after China. The Centre needs to address tax, regulatory and compliance issues that small companies are beset by without any further delay, he said.
The dual levy of service tax and value-added tax on pre-packaged software is a deterrent to the competitive index of small product companies.
“This anomaly needs to be removed,” he said in an email response on the expectations of the industry from the upcoming Union Budget.
“The e-commerce wave has begun in the country, showing huge potential. There is a need to understand the online marketplace and the related tax implications better,” he said.
“Migration to a digital platform is only possible when tax levied is more favourable or at least on par with what it is in the physical world. It will not only encourage adoption but also bring in transparency,” he said.
Punitive interest rates Interest rates as high 30 per cent for delays in service tax payments are sometimes applied in cases where such tax is not even collected from the consumer. “We recommend that such rates be normalised. Given that dynamism drives the business environment, threshold limits need timely revisions,” he felt.
A significant portion of the country’s external trade balance gap is covered by IT exports. SEZs continue to face operational difficulties and provisions such as MAT on SEZ schemes, which ought to be removed, he said.
The Centre needs to promote tier-II and III cities to ensure inclusive growth, said Chandrashekhar. This could ease the pressure on large cities.
“Local industry requires support in infrastructure, process compliance and fast-track approvals,” he said.
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