The sunset clause for SEZ nearing — March 31, 2020 — and the IT industry
has been a big beneficiary of the policy. A government-appointed committee made the case for continuing with SEZ earlier. Nasscom reiterated that “steps are needed to ensure SEZ continues to attract investment and contributes to exports and employment generation. Hence, there is a compelling case to extend the existing tax holidays for another five years”.
The industry body has also asked the government to defer tax liability on grant of Employee Stock Option Plans (ESOP) in start-ups to the time of sale of the shares, instead of when the employee exercises the stock options.
Nasscom asked for creation of a deep tech investment fund of Rs 3,000 crore for deep tech start-ups over the next five years. It also suggested that the taxation regime for the digital economy be eased, including extending tax credit under the equalisation levy to foreign companies in the home country, and ease reporting and compliance requirements under the place of effective management concept.
Rajat Tandon, president of Indian Private Equity and Venture Capital Association (IVCA), who was present at the meeting, asked for zero rating of services provided to alternative investment funds.
IVCA said the extent of foreign investor contribution with the amendment under goods and services tax
law should notify any supplies made to AIF as “deemed export”.