Tuesday, 26 February 2013

Budget expectations - It Sector


Industry wish-list -   
* Tax reimbursement and employment linked benefits.
* TDS for technical services provided in domestic market be reduced from 10% to 2%
Our expectation - May not happen
Rationale for our  expectation -  Revenue considerations may not allow this to happen
Impact of our expectation -  Neutral

Industry wish-list -   More clarity on this issue for shrinkwrapped software and standard offthe- shelf software
Our expectation -  May be provided
Rationale for our  expectation - Uncertainty / litigation relating to witholding tax is an irritant for the industry
Impact of our expectation - Positive

Industry wish-list -  Simplification of refunds process in case of inadequate set-offs
Our expectation -  May happen
Rationale for our  expectation - Expected to lead to faster refunds and better compliance
Impact of our expectation - Marginally positive

 
Industry wish-list -
* Treat software as service (and not goods) so as to avoid double taxation from centre and states
 * Currently there is no clarity
Our expectation -  May not happen
Rationale for our  expectation -  Treating software as 'service' will deprive states of revenues
Impact of our expectation -  Neutral


Industry wish-list -  Clarity on taxation of on-site income
Our expectation -  May happen
Rationale for our  expectation - Uncertainty relating to tax liability is an irritant for the industry
Impact of our expectation -  Positive


Industry wish-list -  Three-pronged approach to clear backlog and provide certainty for future 'Transfer pricing' issues
Our expectation - May happen
Rationale for our  expectation -  Uncertainty / litigation relating to transfer pricing is an irritant for the industry
Impact of our expectation - Positive

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