TAX SOPS FOR EOUS, STPIS TO STAY TILL 2013
Deepshikha Sikarwar & Amiti Sen, New Delhi
The Economic Times
The forthcoming Union Budget may extend the corporate tax holiday enjoyed by export-oriented units and software parks by three more years, as the government looks forward to clearing the air for companies in these segments reeling under a demand slump in key Western markets.
The sops are valid till March 31, 2010, but the government wants to send out a clear message to the 2,000 export-oriented units (EoU) and 8,000 IT firms operating out of software technology parks of India (STPI) campuses, said a government official on condition of anonymity.
“If the sops are extended on a piece-meal basis, it will not encourage fresh investments in such units. Investors will be interested in infusing funds only if they are assured that the tax exemptions would continue for some time,” he added.
The commerce and industry, and IT ministries are pitching for a three-year extension. The official said there was pressure from the industry, which is reeling under the impact of the global financial slowdown, particularly in countries such as the
If the tax holiday is not extended in this Budget, the entities currently enjoying these tax benefits will have to begin provisioning for tax outgo in the current financial year itself.
Various sections within the government do not want these entities to come under further financial pressure, particularly at this juncture when economic recovery in the developed world seems still far away. “At a time when most countries are trying to provide all possible support to their industry, especially the export sector, it does not make sense for us to withdraw a tax sop,” the official said.
The exemptions, given under sections 10(A) and 10(B) of the IT Act, cost the exchequer about Rs 15,974 crore in 2007-08.
The extension of tax holidays to STPIs was contemplated earlier as there are a number of IT special economic zones in the pipeline where the companies could relocate to.
The financial slowdown watered down that argument as many firms shut shop. It was also pointed out that relocation is easier for big IT companies, but not for smaller companies which dominate the sector.
TECHNOPARK TO LAUNCH MEGA IT COMPLEX
Thiruvananthapuram
The Financial Express
The Technopark here, which boasts of being the country’s first technology park, has finalized plans to launch what park officials claim would be the single largest building complex in the country offering space for IT companies.
The 3-million sq ft building complex will come up on a 25-acre campus at the special economic zone plot adjacent to the existing Technopark campus near here. Technopark CEO Merwin Alexander said 18,000 IT professionals could operate from the complex.
Work on the building, to be completed in three phases, is scheduled to begin in September; and the first phase of construction involving 1 million sq ft is expected to be ready for occupation by July 2011. The first phase will also feature a car-parking facility that can accommodate 1,200 vehicles.
Technopark general manager K V Rajendran said the first phase had an outlay of Rs 240 crore and that talks were on with a consortium of banks to tie up funding for the project. He said Technopark would also go for green certification for the block of buildings.
Technopark officials said the building, conceived by architect Hafeez Contractor in association with its consortium partner Iyer & Mahesh based here, would be an iconic building for Technopark.
Technopark presently has an electricity sub-station for power supply to the new campus and for the adjacent campuses of Infosys and UST Global, while other infrastructure needs including water supply, waste treatment and approach road from the highway are being readied.
Officials said Technopark was also developing the remaining land in the newly acquired 92-acre Phase-III campus, which could be offered on lease to private developers.
BOA TO TAKE UP DLF’S REQUEST FOR METRO LINK
The Financial Express
The Board of Approval (BoA) in the commerce ministry, which will meet on June 17 for the second time within a month, will take up the request of realty major DLF to allow the proposed metro rail to pass through its SEZ in Gurgaon.
The BoA, headed by the commerce secretary, will also consider the application of realty firm K Raheja Universal for de-notification of its IT/ITeS SEZ in Navi Mumabi. The firm has sought to surrender the SEZ citing economic slowdown. The DLF Cyber City Developers has requested the BoA to grant permission to the proposed metro corridor to pass through its SEZ in Gurgoan. “...Since the project is on the advance stage of approval from the Haryana government, they (DLF) have requested to grant permission to pass the proposed metro corridor through Cyber City SEZ,” the BoA agenda said.
IT PARK’S TROUBLES JUST WON’T END
Pradeep Sharma,
The Tribune
Taking note of the disturbing impact of continuing development of the IT park on infrastructure, ecology and farmers, eminent residents, including Nek Chand, creator-director of Rock Garden, have urged the Union Home Ministry to scrap Phase III of the IT park which was “in violation of the city’s master plan”.
In a representation to P Chidambaram, Union Home Minister, MN Sharma, first chief architect of Chandigarh, Justice SS Sodhi, former Chief Justice of Allahabad High Court, ML Sarin, former advocate-general, Punjab and Haryana, and Madhu Sarin, author and urban development planner, questioned the rationale of developing the Phase III when Phases I and II were running several years behind schedule and were yet to function to their potential.
None of the five signatories to the representation have any “vested interest” related to the acquisition of land for Phase III or in any other part of the city. The Tribune had recently highlighted the sorry state of affairs at the IT park.