You are here: Home » News-CM » Economy » News
Business Standard

Union Budget 2018-19: ASSOCHAM seeks venture capital pool & lower tax rates for electronics sector

Topics
Business Finance

Capital Market 

Considering that costs pertaining to finance, energy and logistics/transportation constitute major portion of consumer electronics sector, apex industry body ASSOCHAM has recommended the union government to allow weighted deduction of 150-200 per cent of the actual cost on specified components.

Further, these costs are auditable and duly included in the financial statements of a company, noted the ASSOCHAM pre-budget recommendations on direct taxes submitted to the Centre.

With a view to revive private investments in the electronics sector, ASSOCHAM has suggested that venture capital pool may be initiated and coordinated by a bank/special purpose vehicle (SPV) or under public-private partnership (PPP) mode.

While contributors may be offered tax incentives on the dividend, manufacturers may be provided with tax exemptions, it said.

In order to boost the availability of capital funds to India's $100 billion worth electronics industry, it is imperative that a venture capital pool be created and allied tax incentive provided to enable genuine private players to use funds of such pool through a stringent mechanism, said ASSOCHAM secretary general, Mr D.

S. Rawat.

To further make the business competitive in the electronics sector, ASSOCHAM has recommended the government to link the India BPO Promotion Scheme (IBPS) with direct tax benefit.

The government should allow assesses to claim depreciation on assets funded by government subsidy under the IBPS scheme.

It added that government did not receive expected response under this scheme - one reason could be that overall benefit under this scheme will be reduced by 33 per cent as the assesses cannot claim depreciation on assets funded by the government subsidy.

Further, the chamber highlighted that there is currently dispute in taxability of royalty in case of software (being copyrighted article) that forms part of hardware.

Thus, in order to avoid litigation and in line with global principles for taxation of software and judicial pronouncements of Hon'ble Supreme Court in case of customs and service tax, ASSOCHAM has recommended that it should be clarified that distribution of copyrighted articles being software forming integral part of hardware would not fall within the ambit of 'royalty.'

Powered by Capital Market - Live News

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, January 04 2018. 11:58 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU