Nasscom Says Clarity Needed On Tax Framework For IT Industry To Adopt Remote Working In Long Run

CIOReviewIndia Team | Tuesday, 02 February 2021, 03:13 IST

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The Indian Government has developed a comprehensive budget, focusing on sustaining economic activity and investment. However, IT body Nasscom on Monday said more clarity is required on the areas of taxation framework for adoption of remote working on a long-term basis.

It is also noted that the IT/ITeS (Information Technology-enabled Services) industry has been a major growth driver and jobs provider in 2020 and there is space for accelerating it further.

In a statement, Nasscom said, "For the IT sector, one of the biggest needs ahead of us is the development of future business models, with hybrid working becoming a reality. We look forward to the government to provide clarity on providing a framework in direct taxes and indirect taxes for the industry to adopt WFH/remote working on a long-term basis."

Nasscom added that WFH (work-from-home) requires initiation in SEZs (Special Economic Zones) on a long-term basis.

Nasscom said, "Since this requires movement of duty-free goods like laptops etc outside the SEZs, the finance ministry should provide the requisite clarifications under Customs and GST."

Applauding the government’s sharp focus on the sustainable development of the economic activity and investment in the major sections like healthcare, fintech, education, infrastructure, R&D development, startups and manufacturing, Nasscom said, “The Budget has introduced some ease of doing business measures from taxation to investment to boost the country's economic activities and ensure job creation."

According to Nasscom, “We have suggested this same 15% tax rate be offered to IT-ITeS companies in SEZs subject to some employment and investment criteria. We believe this can boost economic development in tier-II cities, drive employment and grow our exports." It also added that the Government has provided 15 percent tax rate for attracting new manufacturing activities.

IAMAI (The Internet and Mobile Association of India) has also welcomed the steps by the Government for boosting the digital industry and the startup ecosystem support.

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