Nasscom seeks sops for small, medium IT firms

The National Association of Software and Services Companies (Nasscom), the apex body of the IT and ITeS industries, has requested the government to extend the STPI (software technology park of India) scheme by one year.

Nasscom has also sought relief to small and medium IT units under the proposed direct tax code (DTC) to offset the impact of the termination of the STPI scheme, which is scheduled to end this month. 

Nasscom president Som Mittal said in Hyderabad on Thursday that a memorandum had been submitted to the government seeking fresh incentives based on the location, innovation or employee potential of the small and medium enterprises (SMEs) in tier 2 and tier 3 cities. 

''With the end of the STPI benefit from 31 March, we expect the government to offer tax exemptions to support SMEs because they are the ones who are driving innovation in the industry. The interim offer of investment-based incentives is not very useful as the IT industry works on human capital and, hence, incentives should be focused on relief for human resources,'' Mittal said. 

He said the country faced a negative trade balance, which could be improved by infotech. ''India needs to focus on IT exports to offset trade balance and technology offers high value-added exports.'' 

The $76-billion IT / BPO industry was disappointed over the government's reluctance to continue the STPI scheme. Besides, the centre has brought SEZs under minimum alternative tax (MAT) in the budget, which will hit IT units.