Decouple BPOs from IT-ITeS: Industry body

The Indian business process industry is raising its voice to be considered a separate industry from the information technology (IT) industry and the setting up of a special business process outsourcing (BPO) department or ministry in the government.

The Business Process Industry Association of India (BPIAI), an affiliated association of the Confederation of Indian Industry, in its pre-budget memorandum, has also demanded the extension for tax sops from the Software Technology Parks of India (STPI) for at least 20 years.

Speaking at BPIAI's pre-budget session, Samir Chopra, president, BPIAI, said, "The manufacturing and IT sectors have enjoyed tax breaks for over 30 years whereas the BPO industry being 5 years old has had very little time to benefit from this though BPO companies have the highest density of workforce, providing a $30 billion export opportunity. Steps must be initiated to decouple the IT/ITeS from the BPO sector."

The association has also suggested the withdrawal of minimum alternate tax (MAT) along with the introduction of advance pricing arrangements for transfer pricing.

The association has also suggested the abolition of the fringe benefit tax (FBT) on ESoPs and simplification of tax holiday provisions.