Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: articles on VAT and GST in India :: cpt :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: empanelment :: Central Excise rule to resale the machines to a new company :: TDS :: VAT RATES
 
 
« News Headlines »
 Govt extends service tax return filing date to April 30
 No move to tax farm income, clarifies Arun Jaitley
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned
 All about income tax return form Sahaj
 Why seeing Form 26AS is a must before filing tax return and how to access it

Finmin opposed to extending tax sops to EOUs, STPIs beyond 2009
December, 25th 2007
In what may prove to be a big setback for the IT industry and small software export companies, the finance ministry has argued against extending tax exemptions to export-oriented units (EOUs) and software technology parks of India (STPI) beyond 2009, rejecting the demand of the commerce ministry and IT industry.

Apart from revenue implication, it may run the risk of being construed as subsidy to exporters and thus, liable to be challenged in the international fora (WTO), the revenue department wrote to the commerce ministry and Cabinet Secretary, expressing its opposition.

In this regard, the commerce ministry had recently prepared a note for the Cabinet Committee of Economic Affairs (CCEA) proposing to extend tax benefits to exporters to provide relief on account of rupee appreciation against dollar.

Observing that there is a need to raise tax-GDP ratio, the revenue department said sunset clause relating to tax exemptions to EOUs and STPIs should not be extended. At present, 90% of profits from software exports are exempted from tax, besides 100% income tax exemption on exports from EOU and STPI units.

In its pre-budget memorandum, IT industry body Nasscom had sought extension beyond 2009 of the tax holiday to firms set up in STPIs. The industry has claimed that rupee appreciation against the dollar by around 15% over the past one year has adversely affected the IT sector, which is contributing about 5% of the GDP.

Sources said the revenue department has also been supported by the Prime Ministers Economic Advisory Council, which has pointed out that the countrys long-term export competitiveness must be built on comparative advantage, and not on the back of tax concessions.

On tax exemptions to EOUs, the council said over the past 15 years, the manufacturing sector has had time to adjust to global forces of competition and has done remarkably well. The sector had enough time to enhance its competitiveness and there is still some time for the schemes to lapse, it added.

Profit-linked tax exemptions like those available under Section 10 A and 10 B of the Income Tax Act have been found to be iniquitous and regressive, read the letter written by the revenue department.

It also pointed out that the matter had been examined by the Planning Commission, which also concluded that tax benefits under the Income Tax Act should not be extended beyond the terminal assessment year 2009-10. The sources said such tax concessions were effective only in the pre-reform regime when exporters faced severe disadvantage, but that rationale is now thinning out.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions