No clarity on IT export norms, says Narayana Murthy

Infosys chairman emeritus and information technology industry doyen N R Narayana Murthy on Sunday slammed the government for failing to provide clarity on the definition of software exports for over a year, causing uncertainty and inconvenience to the industry.

"It has been over a year since the industry had asked the government for its definition of software exports. For various reasons, the officials have not been able to provide it," Murthy told reporters on the margins of a book release function in Bangalore.

At the same time, he heaped encomiums on the finance minister. Noting that the software and IT-enabled services industry had registered $70 billion exports in fiscal 2011-12, he said, "I hope that an extraordinary individual like Pranab Mukherjee will ensure that a quick clarification is provided," Murthy said.

"I have tremendous faith in the finance minister, who is an excellent minister and an excellent person. But it has been a year now since we requested clarification on the definition of software exports and for various reasons the officers have not been able to provide clarification," the Infosys founder said.

Last year, Parliament was informed that the Income Tax Department has slapped a demand of over Rs450 crore on Infosys Technologies for wrongfully claiming tax exemption on onshore services by declaring them as software exports.

Onshore software development is the practice wherein Indian companies send their software engineers on short assignments of three to six months to companies based in Europe, the US, and other nations.