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IT cos. want tax breaks extended

BANGALORE: The immediate fallout of expiry of tax holiday for IT and ITeS industries will be India losing its cost advantage at a critical stage, according to a report, jointly compiled by the Confederation of Indian Industry and KPMG, released here on Friday. The report was based on industry surveys and inputs from the National Association of Software and Service Companies.

K. R. Girish, who worked with KPMG on the report, told reporters here that small and medium IT companies deserved tax breaks most as costs would make business difficult for them and the largest number of respondents wanted the tax holiday continued for five years after 2010. Forty per cent of India’s IT and ITeS exports were to BFSI (Banking, Financial Services and Insurance) customers overseas, a segment badly hit by the economic meltdown but offering opportunities in the form of IT services or products that could help them cut costs, Mr. Girish said. For this, the industry in India needed to maintain its own cost advantage.

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