NASSCOM reaction to the Union Budget 2009-10

Dear All,

Appended below please find the NASSCOM reaction to the Union Budget 2009-10 for your reference. Please do call should you need any clarification or further info.

Regards

Sarmishtha

+91 9899699484

NASSCOM REACTION ON THE UNION BUDGET 2009-10

Key positives for the IT BPO industry c Extend deductions in respect of export profits under Section 10A/B of the Income Tax Act by one more year i.e. FY 2010-11. c Abolish Fringe Benefit Tax. c Alternative Dispute Resolution Mechanism for resolution of transfer pricing disputes and CBDT to formulate `safe harbour’ rules. c Exempt value attributable to the transfer of the right to use packaged software from excise duty and CVD. c Service tax refund mechanism based on self-certification or by a Chartered Accountant. c “Assessee” replaced by “undertaking” in Section 10AA (7) effective 1st April 2010. c

July 6, 2009: NASSCOM welcomes the Budget Proposals 2009-10 aimed at achieving the dual objective of enhancing inclusive growth in India and boosting economic activity in the country. The Budget recognizes the contribution of the IT-BPO industry to India’s economic progress and has provided the necessary measures to boost the sector.

Mr. Som Mittal, President, NASSCOM said, “The Finance Minister’s decision to extend fiscal benefits available to the industry under Section 10A/10B for one year will help the industry mitigate the impact of the current economic environment and help India retain its competitiveness.”

Mr. Pramod Bhasin, Chairman, NASSCOM said, “Many of the initiatives in this year’s budget recognize the role the IT BPO industry can play in promoting inclusive growth and creating substantial employment opportunities in the country. The industry will be keen to partner with the Government in expanding e-governance initiatives including modernization of employment exchanges, the UIAD project, and smart cards for healthcare services so as to achieve enhanced governance. Increased capital outlays on the education and infrastructure sector will also address growth challenges that the country has faced.”

The Budget proposals also address NASSCOM’s recommendations relating to multiplicity of taxes on packaged software, creating a dispute resolution mechanism on transfer pricing, abolishing FBT and issues on service tax refund. The combined effect of these proposals will facilitate the industry and its 2 million workforce to compete effectively and sustain India’s advantage. NASSCOM will continue to examine the fine print and seek clarifications as needed.

NASSCOM would like to express its gratitude to the Union Finance Minister Shri Pranab Mukherjee and IT Minister Thiru A Raja for their unstinted support.

Regards,

Sarmishtha Sinha

Senior Account Executive

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