Lower sales tax on IT products: Pramod Mahajan

CIOL Bureau
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BANGALORE:The Information Technology (IT) Ministry is aiming for stable and transparent taxes for the sector and would ask States to lower sales tax on these products, said the union minister for IT and parliamentary affairs PramodMahajan.


In his address at the India-Silicon Valley Partnership 2000, Mr. Mahajan said that in the Union Budget, the Finance Minister would try his best to streamline the duty structure on software and hardware products. Taxation proposals constituted the second part of the recommendations of the Task Force on IT, the implementation of which would be completed within six months. 

He also said his Ministry would write to all the IT ministries in States to lower the taxes. "It will be a retrograde step to put stumbling blocks on the industry which is just growing," Mr. Mahajan said. Some States had hiked the sales tax on IT products to as high as eight per cent, he said. It was not fair to charge the highest slab on IT in the name of rationalisation of State taxes, he said. "Nobody is asking for complete tax exemptions, but IT should have minimum taxes," he said. 

Rationalisation of taxes at both the Union and the State level was required as the country had to be tax-free in the next five years as per the World Trade Organisation (WTO) deal. "If we can announce it today, they can plan accordingly," the Minister said. 

For a faster domestic growth, governments could play a lead role with e-governance. Towards this, the Prime Minister would call for an IT ministers' meet soon, Mr. Mahajan said. 

The IT minister also said, that the IT Ministry would also be signing a memorandum of understanding with Stanford University of the US for exchange of information on a continuous basis. He said the MoU would provide for exchange of skills and services and the academic excellence of Stanford would be utilised to provide for the upgradation of the IT educational institutions here.