Extend STPI or offer new tax holiday scheme: Infosys

Bangalore, Feb 20 (UNI) The Centre should extend the STPI scheme or offer a SEZ scheme, with an extended tax holiday, to the IT industry, Infosys Board Member T V Mohandas Pai said today.

Talking to reporters here, he said like all other IT companies, Infosys had joined NASSCOM to make a representation to the Centre, seeking extension of STPI scheme or a new tax holiday scheme for the IT industry.

''It is important that smaller companies are provided with cheaper and smaller space as they cannot afford large areas, being offered in SEZ at an exorbitant rate. Above all, IT is a very important industry for the country,'' he said.

Mr Pai said the industry had hired 4.3 lakh people this year, mainly from the middle-class.

''India will lose, if the IT industry plans to relocate to Philippines, China, Western Europe or Mexico, where they can avail tax holidays like STPI scheme,'' he said.

He argued that the tax benefit extended to IT industries through STPI scheme was not high. The benefits extended by the government to the IT industry stood at US Dollar 1.2 billion last year and this year it might go up to US Dollar 1.3 to 1.4 billion due to rupee appreciation.

However, the government got back about US Dollar 1.5 billion last year in form of taxes from the IT employees, he claimed.

Mr Pai said in the last one year the number of captive IT industries set up by multinationals had come down due to uncertainity in tax holiday.

''The MNCs are all asking one question. What will happen after the STPI?,'' he added.

UNI RS AJ 1932