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Pre-Budget Expectations: TAIT wants lower corporate tax rates

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Mumbai-based Trade Association of Information Technology (TAIT),the premier association of IT companies,has called for bold changes to the corporate tax structure in the country, including higher tax breaks for purchase of PCs, Customer Premise Equipment (CPE), Point of Sale (PoS) terminals and other digital solutions.

Rushabh Shah, President, TAIT stated, “For consumers, the government should aim to lower the landed price of ICT products through legislation such as introduction of GST and amendments to the country’s indirect tax regime – this would reduce the price barrier for purchase of IT goods, especially in the SOHO and Education sectors. For corporates, two things are recommended – lowering the overall corporate tax rate, which would increase the availability of discretionary funds for purchase of IT products and increasing the depreciation allowance for investments made in infrastructure, to further increase IT adoption.”

Traditional distribution & retail versus e-commerce
Rushabh strongly recommended providing a level playing field for traditional physical distribution and retail chains vis-à-vis foreign, private equity funded e-Commerce businesses,as small traders are losing money because of the predatory pricing adopted by big competitors such as Flipkart, Amazon and others. This issue needs to be addressed on priority as large numbers of smaller traders are being rendered insolvent due to unsustainable losses.

Taxation of Software
Shah stated, “Taxation on software products is still very high in India.At present, there is dual taxationon software, and the government seems happy to milk both the cows– VAT at the state level and Service Tax at the central level. Nowhere in the world is a product charged twice – first VAT and then Service Tax.This has been going on for a relatively long span of time, and it’s high time that the anomaly is addressed in the upcoming budget for 2017-18. The prevailing price structure is so high it really becomes an impediment in the way of software adoption.”

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