Feb 22, 2013, 07.34 PM IST

Budget 2013-14: NASSCOM wants R&D services to be eligible for SEZ benefits

NASSCOM has presented its annual Pre-Budget and Policy thrust recommendations to the Indian Government, an effort to present the IT-BPM industry’s wish list for the year ahead.

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Source: Moneycontrol.com

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NASSCOM has presented its annual Pre-Budget and Policy thrust recommendations to the Indian Government, an effort to present the IT-BPM industry’s wish list for the year ahead.

In this list, NASSCOM has focused on issues related to enabling entrepreneurship, enhancing the global competitiveness of the IT-BPM industry, helping India emerge as an innovation hub and meeting growth and development goals.

As a part of its suggestions for enabling entrepreneurship, NASSCOM has stated that:

The compliance burden be eased through the removal of unfair levies
Royalty on internet downloads, which will act as a barrier to usage, be removed retrospectively
There is relief from expense disallowance for non-deduction of TDS, and other measures related to uplifting of the TDS burden
Procedural simplifications, such as an automated facility to check PAN, etc., be introduced

In order to improve the competitiveness of the IT-BPM sector, NASSCOM has advised the government to make available promised benefits by streamlining administration. It has stated that:

Income tax paid towards local tax obligations overseas be offset
R&D services be made eligible for SEZ benefits
Deduction for training be extended
Transfer pricing guidelines be rationalised and their domestic threshold enhanced
The SEZ policy be revamped, with no minimum, contiguous land requirement

To help India emerge as an innovation hub, NASSCOM has suggested that:

There be a re-classification of R&D and testing services as exports
The IT sector be allowed to avail existing R&D promotion schemes and that the benefit of the current DSIR scheme be expanded to include computer software
A tailored incentive model be developed for R&D in the IT-BPM sector, extending it to products and services

Finally, NASSCOM has recommended that the government meet development goals by introducing policies and allocations that increase ICT-led interventions in healthcare, education and governance.

It has suggested that India be built into a cyber secure nation through budget allocations and training of cyber security professionals and that Tier II and III locations be promoted for inclusive growth.

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