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Industry expects tax range of 15 to 17% from the Budget

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DQC Bureau
New Update

In order to stimulate demand, the IT industry wants the Finance Minister Jaswant Singh to bring down the tax incidence in the

country to 15 to 17 percent from the current 25 to 45 percent in his budget for 2003-04. "The

Government should make a concerted effort to reduce duties so that the market penetration increases," says Ajai Chowdhry, Chairman and CEO, HCL

Infosystems, who would like to see depreciation limits enhanced. 

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Industry stalwarts want the Finance Minister to take concrete measures in the budget to simplify procedural measures involved

in importing of IT goods to reduce the turnaround time and bring it close to global standards. Avtar

Saini of Intel Asia wants the FM to address EXIM policy to improve business velocity issues. He wants the Government to eliminate bonding and allow

self-declaration status for imports. Atul Mehta, CMD, Compuage Infocom supports Intel point of view when he says, "For

paying customs duty, the government should introduce the self-declaration based model, which will go

a long way in overcoming delays in clearing imported goods." 

The top demand from the software side is to continue the tax incentives under 10A and 10B of the Income Tax Act till 2010

as committed and the deletion or amendment of the sub-sections 10A (9) and 10B (9) to

specifically exclude demergers and amalgamations. 

The channel community overall looks positively at the VAT regime but is not at all confident that it will be implemented from

1st April as majority of the states are yet to carry out the necessary legislation. "Implementation

of VAT is in the direction of ultimate reforms in taxation in the country," comments Paras Shah, MD, Neoteric

Infomatique. 

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When VAT is implemented, channel partners want just 1 percent VAT on IT goods across the country. This, again, partners

feel, would go a long way in stimulating demand. Points out Leslie Lean, MD, Ansata Computer Systems,

"People at homes can afford IT products if taxation is reduced to minimum. 

This will also help us compete with countries like China and Taiwan in terms of hardware manufacturing and sales."

SYLVESTER LOBO



MUMBAI

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