New Delhi, July 30 (IANS) The National Association of Software and Services Companies (Nasscom) Monday welcomed the initiative of Prime Minister Manmohan Singh to review tax laws pertaining to the IT industry, especially MNCs, which have set up captive development centres across the country.
“We thank the prime minister for setting up a committee to address the various tax issues faced by the IT industry, especially the safe harbour provisions for MNCs,” Nasscom president Som Mittal said in a statement.
Earlier in the day, the prime minister’s office announced that a four-member committee, headed by former Central Board of Direct Taxes (CBDT) chairman N. Rangachary, had been set up to review taxation of MNCs and the IT sector to help boost investment.
“The initiative demonstrates the government’s commitment to facilitate the growth of the IT-BPO (business process outsourcing) industry in the country,” Mittal said.
The committee, which will review the taxation provisions made in the union budget for fiscal 2009-10, has been asked to submit its report to the government by Aug 31.
The industry’s premier representative body has been working with the finance ministry, the directorate of international taxation and CBDT on issues related to transfer pricing and onsite services.
“As India is a top destination for global sourcing of technology, a consistent policy regime is important for the industry to grow and innovate. MNC development centres have played a key role in building the industry, create best practices and demonstrate our value proposition. We believe the committee will allay concerns of the industry, global corporations and investors,” Mittal noted.
Activities such as product development, analytical work and software development carried out through MNCs captive entities are known as development centres. They cover diverse fields spanning software, hardware, pharmaceutical research and development (R&D) and automobile R&D.
About 750 MNCs have set up development centres at 1,100 locations across the country, which provides cost competitive and high quality knowledge-related work.
