SMEs Need More Support

BANGALORE, INDIA:

What is your view on the announcement of non-extension of STPI scheme?

The Software Technology Parks of India (STPI) scheme was not extended in the Union Budget of 2011. STPI, which offers tax exemption to export oriented units on profits under Section 10A and Section 10B of the Income Tax Act, was extended by one year till March 2011 in the Budget last year. However, the Finance Minister has announced reduction in the tax on revenues from foreign subsidiaries of the Indian companies.

Also read: AP moots separate industrial estates for MSMEs

How is the proposed GST implementation in 2012 going to be beneficial?

No date for implementation of GST has been announced. The indirect tax regime in India is proposed to be replaced by a comprehensive dual GST with Central GST and State GST to be levied concurrently by the Centre and the States. GST structure would include imports while exports would be zero-rated. For inter-State transactions in India, the State tax would apply in the State of destination as opposed to that of origin. GST will have a significant impact on almost all aspects of businesses operating in the country, including the supply chain, sourcing and distribution decisions, inventory costs and cash flows, pricing policy, accounting and IT systems and transactions management.

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