The Hindu Business Line : Fiscal sops must continue: ESC

THE Electronics and Computer Software Export Promotion Council (ESC) on Wednesday sought continuation of the DEPB licence and fiscal incentives as they existed in 2000, saying it was key to sustain the growing exports.

"Fiscal incentives are important to shore up the competitive edge of Indian products in the international market where margins are squeezed on account of fierce competition, hardening of rupee against the dollar and cost cutting," Mr P.K. Sandell, Chairman of ESC, said in a statement.

Referring to the computer software industry, ESC sought removal of the conditions for availability of income tax benefits under Sections 10A and 10B and said the income tax benefits should be made available until the year 2010 to all units irrespective of their establishment.

It said that the exporting units, which started exports way back in 1993-94, would complete 10 years in 2003-04 and not be eligible for income tax benefits, while units which started operations later will continue to take benefit till 2010.

"This will create discriminatory situation for two different units operating under the same scheme. The units which cannot claim the income tax benefits, will become uncompetitive," ESC statement said.

ESC said income tax benefit is being given to set off high transaction costs and suggested that the benefits should continue in perpetuity. It has also pitched for continuation of Sections 80HHC and 80HHF of the Income Tax Act, in its original form, to allow 100 per cent tax benefits to the exporters under the domestic tariff area.