Representatives from the IT and telecom sectors are seeking a roadmap on the reduction of corporate tax rates and asking for tax benefits to encourage research and development (R&D) activities. These demand, along with others, were put forth at a pre-budget meeting between industry officials and finance ministry officials, including Finance Minister Arun Jaitley.
In addition, the industry has urged the government to promote domestic manufacturing and improve ease of doing business in the country.
Speaking after the meeting, NASSCOM President R Chandrashekhar said it was important to create a level playing field for the domestic industry at a time when protectionist policies are on the rise across the world.
“An important backdrop of our suggestion was that the industry faces headwinds globally because of protectionism and anti-globalization forces in different countries,” Chandrashekhar said.
As part of the industry's wish list, NASSCOM has sought an extension of R&D benefits to the IT sector. The industry has also asked the government to incentivise start-ups in the country. Broader demands included a clearer roadmap on the reduction of the corporate tax rate to 25 percent from 30 percent currently.
Each individual lobby body, representing different segments of the industry, had its own set of demands.
The IT hardware sector, represented by industry body MAIT, sought an extension of the the differential duty scheme for laptops and notebooks.
The Indian Cellular Association, industry body of the mobile phone manufacturers, suggested a differential tax structure for five component categories, including USB cables, keypads, mechanics and microphone receivers.
There are some headwinds globally, and to tackle this, the government needs to give greater incentives for R&D, the industry needs to focus on products, and we need to focus on start-ups. What sort of incentives the industry would need was discussed (in the meeting today).Aruna Sundararajan, Secretary, Department of IT
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