The proposed eight per cent excise duty proposed in the Union budget on packaged software would go against the very principle of software development in the industry, according to IT experts.
"The proposed tax is a kind of punishment for a software developer who prefers to package his solution and sell in the market," Shakti Sagar, Managing Director, ADP Private Ltd said.
While encouraging free down loads from the Internet, the proposed tax would, in a way, inhibit the growth of the domestic industry, he added.
The budget should have talked of the future of the Software Technology Parks of India (STPI) scheme which has given a good boost to industry so far, Sagar said.
"Though the budget do talk about promoting the hardware, it is essential to consolidate and continue the strides made in the software. This has not been addressed by the budget," according to the chairman of a city-based IT major.
There has been also disappointment over the continuation of the Fringe Benefit Tax (FBT). The industry had expected the government to withdraw FBT even at the cost of imposing a corporate tax, according to sources.
{{/usCountry}}There has been also disappointment over the continuation of the Fringe Benefit Tax (FBT). The industry had expected the government to withdraw FBT even at the cost of imposing a corporate tax, according to sources.
{{/usCountry}}"On the FBT front, there is a sure disappointment for the industry," said MLN Acharyulu, Mangaing Director, Qualcore Logic.