Budget 2016: Extend SEIS benefits to STPI units, says Nasscom

Hyderabad: Budget 2016-17 should extend the benefits of Services Exports from India Scheme (SEIS) to Software Technology Parks of India (STPI) units, Nasscom said. “The 2016-17 Budget is crucial for the IT/ITeS and engineering services industry. With this Budget, we expect announcements which may foster a better business environment and increase the ease of doing business in India,” Nasscom Chairman B V R Mohan Reddy said. [caption id=“attachment_2585600” align=“alignleft” width=“380”]  Reuters[/caption] The IT industry in the country has been facing several challenges due to lack of clarity on transfer pricing norms, said Reddy, who is also the founder and executive chairman of Cyient. “We are hopeful that the upcoming Budget will address this and a few other essential elements like a correction in the prevailing high interest rates of 20-30 per cent for safe harbor margins. “Further, foreign trade policies should give benefits of Services Exports from India Scheme (SEIS) to Software Technology Parks of India (STPI) units,” Reddy said. Without such benefits, STPI units are at a disadvantage compared to their SEZ counterparts offering the same services, he said. Meanwhile, Reddy said the revolutionary growth of startups necessitates more initiatives to address the challenges being faced by them. “Initiatives are needed in the areas of facilitating ease of doing business to further boost startups. Exemptions on direct and indirect taxes including MAT, where startups lose a big chunk of cash flows, is the need of the hour. “This will reduce compliance burden and reduce cash outflows. The government should further ensure capital availability at the seed level for startups,” he said. In the recent years, many angel investors have emerged who are helping these startups work on new ideas, Reddy added. Budget 2016-17 has to encourage them and should also allow carrying forward of losses even if there is a change in ownership structure, if it is for capital infusion in the entity, he said. PTI