New Delhi: Even though there was no mention of the fate of the tax-holiday for Software Technology Park of India (STPI) scheme in Budget 2010-11 which had left the country’s $50-billion software services export sector disappointed, industry and commerce minister Anand Sharma on Wednesday said his ministry will talk to the finance ministry for extending the tax holiday scheme for STPI by another year beyond March 2011. He also said that a National Manufacturing Policy to attract investments in manufacturing sector will be finalised by August this year.
“We want to make India one of the factories of manufacturing industry in the world. Manufacturing sector holds the promises and new opportunities. We need something to fast trek the investments into this sector and the national manufacturing policy will make investments more attractive,” Sharma said.
He also pointed that a single document Foreign Direct Policy (FDI) is going to be finalised soon which will make the FDI much simpler into the manufacturing sector. “Too many Press Notes makes the policy very complex and create confusion. Currently we have 177 press notes for FDI policy. Therefore we decided to do away with the 177 press notes and drafting a single policy document which will make the policy and procedures much simpler for investors. The single document FDI policy will be effective by March 31, not a day later than that,” assured Sharma.
As for the tax holiday scheme extension for STPI scheme, Sharma said he was very considerate of the concerns of the industry players. Most IT players said that the non extension of the tax holiday for STPI scheme will come as disincentive to the IT software and BPO industry along with hurting India’s attractiveness as the world’s technology hub. The fact that the Minimum Alternate Tax (MAT) has also been increased to 18% after being increased to 15% in the previous Budget (for the earlier 10%) is a further dampner, most of them said.
IT industry body Nasscom, which has been demanding parity of incentives between the STPI and the SEZ scheme said it will engage with the government through the department of IT to represent for an equitable benefit to the SME sector.
Source : Financial Express