Nasscom welcomes review of IT sector tax laws

The National Association of Software and Services Companies (Nasscom) yesterday welcomed the initiative of prime minister Manmohan Singh to review tax laws pertaining to the IT industry, especially MNCs, that have set up captive development centres across the country.

''We thank the Prime Minister for setting up a committee to address the various tax issues faced by the IT industry, especially the safe harbour provisions for MNCs,'' Nasscom president Som Mittal said in a statement.

Earlier in the day, the Prime Minister's Office (PMO) announced the setting up of a four-member committee, headed by former Central Board of Direct Taxes (CBDT) chairman, N Rangachary,  to review taxation of MNCs and the IT sector to help boost investment, a development that Nasscom has welcomed.

Mittal said the initiative demonstrated the commitment of the government to facilitate the growth of the IT-BPO (business process outsourcing) industry in the country.

The committee, would review the taxation provisions made in the union budget  for fiscal 2009-10 and would submit its report to the government by 31 August. The premier representative body of the industry has been  working with the finance ministry, the directorate of international taxation and CBDT on issues related to transfer pricing and onsite services.

Mittal said, as India was a top destination for global sourcing of technology, a consistent policy regime was important for the industry for growth and innovation. He added, MNC development centres had played a key role in building the industry, creation of best practices and demonstration of the industry's value proposition.