Union Budget What the IT Industry Got

Finance Minister Pranab Mukherjee laid proposals for the IT/BPO industry in

the Union Budget 2010-11. Some of the the key highlights were:

• Introduction of Goods and Services Tax (GST) from April 2011
• Allocation of Rs 1,900 crore for the unique identification project
• Reduction of custom excise duty from 8% to 4% for LED lights
• Two more computerization centers for the administration of direct taxes
• Continued investment in special economic zones
• A citizen centric governance project to be launched in Pune, Kochi, and
  
  Chandigarh.

Some major initiatives have been the complete liberalization of pricing and

payment of technology transfer fee, trademark, brand name, and royalty payments.

An interesting point here is that payments are now under the automated route. A

national clean energy fund for funding research and innovative projects in clean

energy technologies has also been proposed by the Finance Minister. An effluent

treatment plant at Tirupur is also on the anvil.

It has been decided to provide appropriate banking facilities to habitations

having population in excess of 2000 by March, 2012. It is also proposed to

extend insurance and other services to the targeted beneficiaries. With

appropriate technology back up, it is proposed to cover 60,000 habitations.

ITs Role in the Limelight



The FM has said that to achieve the rollout of GST by April 2011, the

indirect tax administrations at the center and the states need to revamp their

internal work processes based on the use of information technology. In this

context, Automation of Central Excise & Service Tax (ACES) has already been

rolled out throughout the country this year. This will impart greater

transparency in tax administration and improve the delivery of taxpayer

services. Similarly, a Mission Mode Project for computerization of commercial

taxes in states has been approved recently. With an outlay of Rs 1,133 crore of

which the centers share is Rs 800 crore, the project will lay the foundation

for the launch of GST.

Technology for Agriculture



The FM has proposed to address a few key areas that call for focused

attention. These include a strong supply chain for perishable farm produce to

reach consumption and processing centers promptly; infrastructure and technology

to convert such produce into value-added products; and infusion of technology to

augment agricultural production.

Digitalization is the Future



The FM has urged that the multi service operators need to invest in digital

headend equipment. He has proposed to provide project import status at a

concessional customs duty of 5% with full exemption from special additional duty

to the initial setting up of such projects.

IT and BPO Initiatives



The FM has proposed to ease the process of refund of accumulated credit to

exporters of services by making necessary changes in the definition of export of

services and procedures.

PC Suraj



surajp@cybermedia.co.in