Deepshikha Sikarwar,
The Economic Times
IT companies, which have been lamenting the government’s reluctance to extend the popular Software Technology Parks of India (STPI) scheme, have something to cheer about. They can continue to enjoy the tax holiday under the industrial parks scheme. The Prime Minister’s Office (PMO) has asked the Union finance ministry to extend the industrial park scheme — which offers a 10-year tax holiday — to the IT sector.
The finance ministry — which had extended the industrial park scheme till March 2009 — had excluded the IT sector from the facility. North Block had virtually taken over the scheme from the Department of Industrial Policy and Promotion (DIPP).
The PMO’s missive comes after both the IT ministry and DIPP petitioned against the finance ministry’s move to exclude the IT sector from the scheme. This means that units — including IT, if the change happens — set up before March 2009 will enjoy a 10-year tax holiday. Thus, a unit set up in April 2008 will enjoy a tax break till 2018.
The PMO has also asked North Block to reduce the minimum area criterion. The finance ministry had prescribed the minimum area of 50,000 sq mt to encourage large manufacturing hubs, when they extended the scheme. The scheme, in its original form, did not prescribe any minimum area condition. Now, the PMO wants this to be diluted.
A revised notification is expected now and the minimum area could be reduced to 14,000 sq mt to enable IT companies to fit in. The finance ministry had raised the industrial use area to 90% from earlier 66%.
No one industrial unit can occupy more than 25% of the land in a park, bringing it down from 50%. However, these two conditions may be kept untouched in the revised notification, which is expected to come out shortly, a government official told ET.
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