Group of Technology companies (GTech) have expressed the IT /ITES Industry’s disappointment over the Union budget 2011-12 presented by the Finance Minister. Though the budget is aimed at ensuring the inclusive growth of the Indian economy, GTech felt that Union Government should have considered extending the STPI scheme for a specified period for the IT Industry operating in the tier 2 and tier 3 cities.
Mr. V K Mathews, Chairman GTech said “GTech welcomes the proposals in the budget like changes in the Income Tax Slabs and the proposed implementation plan of the Uniform Direct Tax Code and Goods Services Tax (GST) by April 2012. However the increase in minimum alternate tax from 18 % to 18.5 % and non-extension of STPI scheme would hit the IT companies operating in the state. The Government should have kept the MAT at the levels prevalent internationally at one third of the corporate tax.”
“A sigh of relief for the SMEs was the facilitation to convert smaller firms to limited liability partnerships by not subjecting them to capital gains tax. It is also good to note at this juncture that LLPs are not subjected to MAT when located in an SEZ. On the flip side this will mean that the SMEs will have to ramp up their infrastructure in relatively expensive SEZ spaces quite soon. We were really hoping that at least an investment based tax relief would be provided for the existing STPI units” said Anoop P Ambika, Secretary, GTech.
GTech said that the budget allocation for the Infrastructure, Agriculture and Health sectors would ensure the sustainable growth of the Indian Economy. Appreciating the Finance Minster for fiscal prudence in containing the fiscal deficit to a new target of 4.6 %, GTech felt that this would send a positive signal to Investors on India’s economic outlook.
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