Nasscom welcomes first 5-year EXIM policy

NEW DELHI: National Association of Software and Service Companies (Nasscom),

the apex association for the software and service companies in India has

welcomed the 2002-2007 EXIM policy as it will serve as a boost to IT exports and

increase India's competitiveness in the international market.

The proposed modification in the Electronic Hardware Technology Park (EHTP)

scheme will enable the hardware industry to face zero duty regime under ITA-1

and will be eligible for counting export obligation. This will provide a big

boost to the domestic IT market and make the hardware industry globally

competitive. Growth of hardware will be specifically helpful for emerging growth

areas such as embedded software development or bio-informatics, which are

heavily dependent on hardware.

The Income tax concession announced for units in SEZs in likely to be a

graded exemption for export profits over a specified number of years starting

whenever the unit is set up. As per the proposed new tax concession, a unit in

SEZ would be entitled to full income-tax exemption export profits for the first

five years of operation and 50 per cent of the export profits would be tax

exempt for the next two years. This is a very positive move and encourages more

companies to set up export units and avail full tax exemption.

IT concessions to units in SEZz and permission to Overseas Banking units

(OBU's) to set up in SEZs will play a significant role making the Indian

companies internationally competitive.

Launching of the Market Access Initiative- in line with the promotional and

development schemes implemented by various other competitive countries will help

act as a catalyst the Indian export market. Nasscom looks forwards to work

closely with Minister and see that the funds are utilized to expand Indian IT

industry's horizons and further build the India Inc. brand. 100 per cent

retention in the EEFC account instead of 70 per cent and extending the

repatriation period for realization of exports proceeds from 180 days to 360

days to all (available earlier to SEZ and exporters exporting to Latin American

countries) is another significant advantage rendered to the Indian software

exporters.