Budget fails to resolve transfer pricing row, say IT honchos

 IT service sector honchos have criticised the Budget for its failure to resolve the transfer pricing litigation, hike in service tax and existing ambiguities in taxation of software products and services.

India’s IT industry performed well during the year and is expected to grow by 13 per cent this year. Nasscom forecast that software exports for 2015-16 would grow between 12 and 14 per cent to about $110-112 billion, compared with the 13 and 15 per cent growth estimate for the current fiscal year.  Microsoft India chairman Bhaskar Pramanik said that the finance minister has presented a broad-based Budget focused on accelerating India’s inclusive growth.

 Pramanik added that the government should accountable for delivering on their Budget promises. “Many of the announcements made in previous Budget, which were geared to minimize/resolve transfer pricing litigation are yet to be implemented. It is nice to make a mention of the measures for dispute resolution in the speech, but the key is implementation,” he said.

TCS chief executive officer and managing director N Chandrasekaran told Deccan Herald that Finance Minister Arun Jaitley’s measures will provide more opportunities for innovation-led companies to partner in India’s growth. He also welcomed the firm timeline for the implementation of GST and deferment of GAAR by two years.  “The reduction in corporate tax, albeit over the next four years is certainly welcome. More because it also comes with the reduction of exemptions. Exemptions create confusion. I welcome the simpler framework the government is proposing. There was a mention of removing SAD on components to remove the duty inversion. This can help local manufacturing of electronic goods as part of the Make for India initiative,” he said. 

Wipro Executive Director & Chief Financial Officer Suresh Senapaty congratulated the finance minister for delivering the Budget with clear policy directions across the board.
“The government’s objective of accelerating economic growth is laudable. The focus on ease of doing business will spur growth and economic development. The Budget has accorded due regard to technology. While the Budget laid stress in adopting information technology for governance in plugging subsidy leakages and in tax administration, it has also supported technology innovation in Industry by rationalizing tax on royalty,” he said.
Cognizant India Executive Vice Chairman R Chandrasekaran said the Budget has its thrust in the right areas, coming as it did against the backdrop of high expectations.

According to NetApp India & SAARC president Anil Valluri, the Budget is a bold and an assertive one. “We are pleased to know that local businesses and budding entrepreneurs stand to make a mark globally through various schemes that will help them prosper. Creation of Micro Units Development Refinance Agency (MUDRA) Bank with a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore is a positive step to encourage young who aspire to become first generation entrepreneurs or expand their activities,” he said.