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Extend tax holiday for IT SEZs, Nasscom tells govt

Date: 08-04-2020
Subject: Extend tax holiday for IT SEZs, Nasscom tells govt
Bengaluru: With the IT/ITeS sector reeling under the impact of the coronavirus outbreak, IT industry body Nasscom has asked the government to extend the tax holiday to IT SEZs for the 2020-21 fiscal. The direct tax benefits under the sunset clause expired on March 31.

“The Covid-19 crisis has had global ramifications and even planned investments from entities based in India, the EU, the US, etc, will take some time to be operationalised. Hence, it is important to extend the scheme,” Nasscom said in response to a TOI query. 

The government has given a three-month relief to all SEZ units that got approval before March 31 and couldn’t commence operations due to the pandemic. They now have time till June 30.The scheme for IT SEZs allows for 100% income-tax exemption on export income for the first five years, 50% for the next five years, and 50% of the ploughed back export profit for the following five years. New SEZ occupiers commencing operations beginning April 1 will not be eligible to receive direct tax benefits, but they will continue to receive benefits such as exemptions on GST. It is estimated that in 2018, software accounted for $43.2 billion of the total SEZ exports of $85.6 billion.

Rohan Sharma, director of research India in Cushman & Wakefield, said the vacancy levels in IT SEZs in 2019 were lower by over 590 basis points compared to the Indian vacancy level of 13.2%. 

Tech cities are likely to continue playing a significant role in the SEZ landscape, having a major share of the upcoming supply between 2020-22. Chennai leads the pack with 55% of space off-take, followed by Hyderabad and Bengaluru at 44% and 40% respectively.

Source:- timesofindia.indiatimes.com

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