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STPI seeks tax advantage for IT and ESDM units in revised IPR

No Comments Sub Category:Uncategorized Posted On: Mar 28, 2014

The Software Technology Parks of India (STPI) has requested the state government for reintroduction of provision of zero rated sales under Odisha VAT act for the IT and ESDM (Electronic System Design and Manufacturing) units of the state to make them competitive in the world market in the draft Industrial Policy Resolution (IPR).

Earlier, under section-18, the tax rate imposed was zero on the goods sold in course of inter-state trade or commerce. After the change in 2008, the facilities were restricted to capital goods which are used directly for the production process.

STPI feels that the provision  had helped the IT and ITes units in STPI and SEZ to reduce inputs costs and made them very competitive  in the international market. The IT and ITes units undertake major cost at the setting up a unit like building a software development block, food court, residential training facility, utilities block, networking centre, voice and data communication centre and recreational facilities and other employee utility facility and all the input material cost attract VAT or CST (central sales tax) at the time of setting up the facilities and the IT and ITes attract major expenses on maintenance and purchase of consumables for capital equipment like air conditioners, computer and peripherals, diesel generator sets and UPS to run 24/7 without any disconnection from power, networking equipment and electrical installations.

The IT exports has reached about Rs 2000 crore in 2012-13 from the state which has the big target of getting Rs 15000 crore turn over by 2020. At the same time, a number of projects IT and ITes have been started under STP and SEZ and the new opportunities in IT sector are likely to come up due to new liberalized policies of the Union government.

Source: The Business Standard

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