Address tax issues, push data centre infra: Tech cos to FinMin

Top officials from IT, BPO and eCommerce sectors today requested Finance Minister Arun Jaitley to address certain issues related to taxation in the Budget 2015-16, and provide incentives for setting up data centres in the country.

They also suggested that the minister look at ways to help in growth of software product firms and start-ups in India, while drawing his attention to issues such as double taxation, VAT and treating of software as physical goods.

This was for the first time that the Finance Minister held an exclusive Pre-budget consultative meeting with the IT-ITeS industry. The Union Budget 2015-16 is to be presented next month.

The meeting was attended by Infosys CEO Vishal Sikka, Wipro CFO Suresh Senapathy, Tech Mahindra Executive Vice Chairman Vineet Nayyar, Nasscom President R Chandrashekhar, Flipkart co-founder Sachin Bansal, Snapdeal co-founder Kunal Bahl and other officials.

“We all shared our views around easing the efficiency of doing business and taxation and things of this nature. I met the Prime Minister in the morning and requested him to look at the start up scene. We are seeing some disturbing early signs that start ups find it difficult to do business in India,” Sikka told reporters here after the meeting with Jaitley.

Collectively, the industry stressed on the need to provide a nurturing ecosystem for start ups, he added.

IT-ITeS industry body Nasscom’s Chandrashekhar said that the industry stressed on clarifications and streamlining with regard to issues like Advanced Pricing Agreements (APAs) under the Double taxation Avoidance Agreements (DTAA).

“We brought out concerns with regard to procurement of technical equipment and services for the government especially in the areas of eGovernance,” he added.

The industry also brought out the concerns with regard to taxations and incentives to promote and facilitate movement towards digital economy, Chandrashekhar said.

“Issues relating to incidence to multiple taxation or interpretation by States with regard to eCommerce and the treatment of eCommerce. Issues and difficulties to creators of products having warehouse as one of these places of business was also discussed,” he added.

Senapathy said many issues were discussed like taxation, capital markets, ease of doing business, skill India, digital India, innovation India.

“We also discussed transfer pricing and the government is convinced that they want to improve ease of doing business,” Senapathy said.

In an official statement, Finance Ministry said major suggestions include incentives for setting-up of data centres within the country.

“It was said there is a need to give tax incentives for building infrastructure for large data centres and cloud services within the country to ensure data security as well as to have a big network of large software products companies within the country,” it added.