'Abolish fringe benefit tax'

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'Abolish fringe benefit tax'

2009-07-02 09:10:11
Last Updated: 2009-07-02 16:26:09

From an IT /ITES industry perspective, the following are on the wish list that we expect the Finance Minister to consider:

Extension of availability of benefits under Sections 10A and 10B for STPI and EOU units beyond the sunset date of March 31, 2010.
Abolition of MAT for STPI and export-oriented units (EOU) units enjoying tax holiday. This defeats the very objective of a tax holiday.
Abolition of fringe benefit tax (FBT), especially levy of FBT on ESOPs, which is not a "collective benefit" granted to employees. Also several expenses, which are incurred in the normal running of the business, are included under the levy of FBT. FBT on expenditure such as gifts to customers, client meetings, tour & travel and conveyance which have no element of disguised perquisite should not be liable for FBT.
The interim Budget had stated that the anomaly in computing the SEZ eligible profits would be rectified. At present as the ratio prescribed considers the proportion of the SEZ turnover to the total turnover of the company and not just the SEZ unitâ€™s turnover. This reduces the quantum of exemption, if the company has non-SEZ units also and the anomaly must be rectified in the coming Finance Bill.

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Service tax: Need to speed up the refund of service tax and going forward exempt service tax for all export-oriented units. Also look at possible reduction of tax rate for corporate tax rates and cess and surcharge.

Suresh Ramachandra, CFO - Applications and Process Solutions, Perot Systems

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All about: Tax, IT, Budget, FBT, Slab

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