Government mulling new scheme for non-SEZ units

KOLKATA, INDIA: The central government is mulling introducing a new scheme to provide export benefits to non-SEZ units, the country's largest IT trade facilitation body Electronics and Computer Software Export Promotion Council (ESC) said Wednesday.

This move of the government is aimed at restoring a level-playing field between the Special Economic Zone (SEZ) units and non-SEZ units in India following the expiry of the STPI sunset clause effective March 31, 2011.

Under the Software Technology Park of India (STPI) regime, Indian IT firms had enjoyed export-oriented tax benefits.

The SEZs, however, allows direct tax exemption on export-linked profits for a 15-year period.

According to D.K. Sareen, executive director, ESC, discussions were on with the commerce ministry to seek tax benefits similar to STPI scheme for small-scale software firms.

"Small and medium software firms should be given tax incentives at par with the bigger companies having set up their units in a SEZ," Sareen said.

"The centre has agreed in principle and promised us of a new scheme to compensate for the loss of tax benefits in a non-SEZ unit. Unfortunately, it has not announced any scheme yet," said Nalin Kohli, past chairman, ESC and president of the association of small & medium knowledge industries.

Sareen said the Indian IT companies were eyeing the upcoming World Cup soccer and Olympics, to be held in Brazil in 2014 and 2016, respectively, for a slice of the pie.

"We will be focusing on Brazil a lot as the upcoming World Cup soccer and Olympics will open up huge opportunities for Indian IT companies. The IT infrastructure budget for the events is pegged at $180 billion," he added.

Meanwhile, a two-day international IT exhibition and conference 'INDIASOFT 2013', mainly focused on small and medium ICT companies will be held in Kolkata from March 21.