Interviews
Business Process Industry witnesses phenomenal growth
12 Feb '08
3 min read
He further added that the BPO industry is not looking for any fancy amendments in Budget 2008. Its expectations are simple; the tax framework ought to be more equitable and growth focused and less complex and arbitrarily administered.
BPIAI in its pre-Budget memorandum suggested the extension of tax holidays for STPI units for 20 more years, withdrawal of MAT, introduction of advance pricing arrangements for transfer pricing, abolition of FBT on ESOPs and simplification of tax holiday provisions are some of the key expectations.
Extending the STPI scheme will also help offset the losses incurred due to the movement of rupee, which has appreciated by13% since April 2007 and has drastically hit the bottom-line BPOs.
The business process wants tax sops not only for its international business that generate foreign exchange but also for the fast growing domestic segment which is generating huge amount of employment opportunities in tier 3 - tier 4 cities and in remote towns and villages which is something the IT industry is unable to do.
Amongst other recommendations, a need for the recognition of the Business Process Industry as a separate Industry from the IT industry and the setting up of a special BPO department or Ministry in the Government, a proper method of determination of export turnover, optional ESI scheme are proposed to be put forward before the Finance Minister for consideration.
It was mentioned that unless the Government takes a very proactive stand to the BPO segment of the economy as a whole, a lot of the cost advantages that are this country's USP might dissipate.
The advantages that we get vis-à-vis tax breaks etc. will be passed on to the customer either in its entirety or in part thereof and unless we are cost competitive, the projects that really matter to this industry will move elsewhere.
BPIAI in its pre-Budget memorandum suggested the extension of tax holidays for STPI units for 20 more years, withdrawal of MAT, introduction of advance pricing arrangements for transfer pricing, abolition of FBT on ESOPs and simplification of tax holiday provisions are some of the key expectations.
Extending the STPI scheme will also help offset the losses incurred due to the movement of rupee, which has appreciated by13% since April 2007 and has drastically hit the bottom-line BPOs.
The business process wants tax sops not only for its international business that generate foreign exchange but also for the fast growing domestic segment which is generating huge amount of employment opportunities in tier 3 - tier 4 cities and in remote towns and villages which is something the IT industry is unable to do.
Amongst other recommendations, a need for the recognition of the Business Process Industry as a separate Industry from the IT industry and the setting up of a special BPO department or Ministry in the Government, a proper method of determination of export turnover, optional ESI scheme are proposed to be put forward before the Finance Minister for consideration.
It was mentioned that unless the Government takes a very proactive stand to the BPO segment of the economy as a whole, a lot of the cost advantages that are this country's USP might dissipate.
The advantages that we get vis-à-vis tax breaks etc. will be passed on to the customer either in its entirety or in part thereof and unless we are cost competitive, the projects that really matter to this industry will move elsewhere.
Confederation of Indian Industry
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