NEW DELHI: Science and technology minister Kapil Sibal has joined the clamour for extending the tax-holiday scheme for software firms beyond 2009, but revenue officials said the finance ministry does not favour continuing tax-breaks indefinitely, even after the initial purpose for which the concession was extended has been met.
“There is a definite sunset clause in the software technology park scheme,” a revenue official said. “This 2009 deadline should be adhered to in the interest of stopping revenue outgo and keeping the tax system simple and clean,” he said.
A Bloomberg report from Beijing quoting Sibal said India may extend the software technology parks programme, which gives computer services
exporters a 10-year tax holiday, beyond a 2009 expiry deadline. “It’s most likely that, if this is benefiting the country, it will be extended,” Sibal said in an interview in Beijing on Monday.
IT minister Dayanidhi Maran has also, in the past, demanded that the scheme be extended beyond 2009 to maintain continuity in India’s software export momentum.
Tata Consultancy Services and Infosys Technologies, India’s two largest computer services exporters, have led the industry in lobbying the government to continue the software technology parks programme, which extends the benefits to small companies and start-ups, on concern that the industry may miss a $60 billion export target set for 2008.
