Union Finance Minister Nirmala Sitharaman decision to look into the matter that is forcing Indian tech companies to register outside India has brought a sigh of relief to many entrepreneurs.
The Minister decision came at a meeting with Tamil Nadu’s tech entrepreneurs who insisted the finance minister to solve the problems regarding the barriers faced in the value creation of IT products by Indian IT.
As said by the founder of software firm Kissflow Suresh Sambandam, due to some difficulties faced by entrepreneurs in the Indian market and hence registering business outside India, the country could be losing the revenue generation as the SaaS sector, giving $1 opportunity itself, can play a leading role in the government’s goal of reaching a $5 trillion economy.
“Despite the changes in the business models, on the taxation front, the software is still treated as a consulting service and TDS is being levied on the sale of essentially a product and I requested the Finance Minister to look into it,” said Sambandam. The finance minister assured to look into the matter and ask them to send a detailed note.
Other industries like healthcare and cement also brought up some issues. N Srinivasan, MD of India Cements said “The price of coal has gone through the roof. What was $70 a tonne is now $170-$180 a tonne. There is an import levy of Rs.400 and for pet coke it is 11%. Considering the steep increase, we have sought a reduction in levies”.
According to sources, the leaders from the healthcare sector sought from the Finance Minister fiscal incentives to set up hospitals in tier-II and tier-III cities.
Responding to the requests, FM Sitharaman assured that the disinvestment plan “was on track” and the Development Finance Institution announced in her recent budget speech would be operational soon. Liquidity would no longer be a concern, she added.