On Monday, Nirmala Sitharaman, the Union Finance Minister, stated that she would investigate the obstacles in the IT products sector that force Indian SaaS companies to register outside of the country.
Sitharaman heard requests and input from various sectors during a meeting with industry executives from CII and Ficci. As a center for the software-as-a-service (SaaS) industry, Tamil Nadu’s tech entrepreneurs emphasized that IT products will lead to value creation by Indian IT. They requested the finance minister to clear a few roadblocks.
Suresh Sambandam, the founder of software business Kissflow, told the FM that the SaaS industry, with a $1-trillion possibility, can help the government achieve its goal of a $5-trillion GDP. However, due to various impediments, entrepreneurs prefer to register their businesses outside of India, causing the country to lose out on economic generation.
“Despite the changes in business models, the software is still considered as a consulting service, and TDS is imposed on the sale of what is fundamentally a product, which I recommended the finance minister investigate. Because pricing is apparent on websites, the archaic procedure of completing ‘softex’ (software export) documents for estimating the value of software also needs to be phased out,” he said.
“The finance minister was sensitive to the points raised and requested us to give a comprehensive note to the ministry, which she agreed to look into,” Sambandam said.
The cement sector, represented by India Cements MD N Srinivasan, asked for a temporary tax break on coal and pet coke imports.
“The price of coal has soared to new heights. What was once $70 a tonne has risen to $170-180 per tonne. There is a duty of Rs 400 per tonne on imported goods, 11% for pet coke. We requested a reduction in levies because of the substantial increase,” he stated.
Furthermore, the MMDR Act for minerals, which included limestone, hampered cement capacity expansion. “We have no issues with the MMDR Act, but it (the levy and rules) should not prevent the establishment of new cement capacities,” he added, requesting an invitation to pre-Budget meetings from the finance minister.
Representatives from the healthcare sector have requested financial incentives for hospitals to be built in tier-2 and tier-3 cities.
The government’s disinvestment plan, according to Sitharaman, is on track. She also stated that the Development Finance Institution mentioned in the Budget will be functioning shortly, and that liquidity is no longer an issue. The Bank-NBFC-MFI pipeline has been cleared, and a particular push to get credit to people who need it will begin on October 15, she stated.
In Madurai, she also met with the Tamil Nadu Chamber of Commerce and Industry officials to discuss their concerns. The businessmen demanded that the ambiguity in determining a single GST rate for all commodities covered under one chapter be removed. They also advocated for tax exemptions on vital food goods, whether branded or unbranded, to encourage all food producers to invest in branding and ensure quality.