I have always doubted the credibility of continued favoritism being extended to the information technology (IT) industry by the government of India. This is usually given by way of exemption from various applicable taxes (income tax, excise duty, customs duty etc) or in other ways.
Here is a summary of the incentives given to the IT industry, as revealed by the government itself in the Indian Parliament today, in response to a question by a member of parliament.
Ministry of Communications & Information Technology
03-August, 2011 15:13 IST
| Incentives to IT industry The Minister of State for Communication and Information Technology, Shri Sachin Pilot today informed Lok Sabha in written reply to a question that Government extends several incentives for Information Technology Sector in the country. Under Software Technology Parks (STP) scheme, approved units are allowed to import goods required by them for carrying on software export activities as per the Foreign Trade Policy. Such goods may be imported either on outright purchase basis or free of cost or on loan basis from the client without payment of custom duty. Apart from this, the approved STP units can avail excise duty exemption on procurement of indigenously available capital goods, components & other specified goods. Apart from this, Software is exempted from basic customs duty. Furthermore, several items for the IT sector are covered under the ITA Agreement, and hence exempted from customs duty. Section 10AA of the Income Tax Act provides for a deduction from the total income of hundred percent of profits and gains derived by a unit located in a Special Economic Zone (SEZ) from the export of articles or things or from services for the first 5 consecutive assessment years, of fifty percent for further 5 assessment years and thereafter, of fifty percent of the ploughed back export profit for next 5 years. As per the Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, the Central Excise duty collection from IT Sector in respect of units registered with Central Excise during the current financial year upto June, 2011 is Rs. 4.47 Crore. Collection from other charges viz. MOT, Fines, Penalties etc. is Rs. 45.3 lakhs only in respect of these units. The “Other Charges” relate to Central Excise duty and do not include Service Tax and Customs Duties. SP/ska (Release ID :73758) |
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