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Simplify transfer pricing, service tax rules: Nasscom
February, 17th 2009

The $52 billion Indian IT industry wants the government to simplify certain rules on service tax and transfer-pricing to make India more attractive for business.

"This is the time to give the message to the whole world that India is the place to do business with and business in. We are not disappointed as we were not expecting anything from the Budget.

We want the government to simplify multiplicity in service tax and make investor-friendly rules for transfer-pricing to help us manage the downturn," Nasscom President Som Mittal told PTI.

Service tax is 12 per cent at the moment. At present, transfer-pricing norms are applicable to MNCs operating in India and captive BPO and call centres. MNCs find Indian transfer-pricing norms regressive.

He said the government has made it clear that tax exemption available to software export revenue would continue till 2010.

"We want modest service tax on software. There are (multiple service taxes) at the moment at every point. We would like this to be simplified in the interpretation. The government needs to step in here. This can be done outside the Budget.

 
 
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