At NASSCOM, our aim is to build an inclusive business ecosystem which finds favour with SMEs as well as large organisations in equal measure, facilitate government and industry to migrate towards a digital economy and leverage IT towards realizing the “Make In India” vision.
We have made certain budget recommendations to the government, which we believe will take us a step closer. The voice of tech start-ups and SMEs – representative of young, energetic and innovative minds – is increasingly gaining prominence and growing louder by the day. The constant clamour for easier access to funds, mentorship needs and simplified framework has put the onus on the need to make an appropriate representation, which will facilitate such an environment. On the other hand and equally so, large companies require stable policies and predictable regulations to continue its global journey.
Some salient recommendations are:
- Addressing regulatory and tax challenges for technology start-ups and SMEs. Those pertaining to funding, regulations and taxations discouraging investors and ambiguous Software product taxation as well as implementation issues.
- Incentives for technology start-ups and SMEs. For instance – extending provisions on deduction for employment and skill development (Section 80JJAA), R&D credits, Suggestions also made for new provisions like offsetting manpower training cost, deferred tax credits for start-ups.
- Interest rates on penalty for service tax, for amount under litigation, should be rationalized. Defaulters may be taxed at a punitive rate of 30 %. For others, where there is a dispute over legal interpretation on applicability of service tax, a nominal rate of interest maybe notified.
- To encourage growth of ecommerce. Taxation on digital transactions should be at least, at par with the physical world, if not reduced, to facilitate adoption and migration to technology enabled platforms. This will help Government leverage the inherent transparency and traceability of online transactions.
- Towards Make In India. Extend incentives to the Indian Industry for adoption and implementation of IT tools for efficiency enhancement, ensuring sustainability and global competitiveness.
- Policy revisions/clarifications for expansion of the Industry to increase both exports and domestic business.