Union Budget 2012 should make taxation simple for SME IT firms: Vikas Khanvelkar, DesignTech Systems

With cost pressures mounting, small and medium IT companies are facing strong growth headwinds. In this light, Vikas Khanvelkar, Managing Director, DesignTech Systems is of the opinion that the Finance Minister, Pranab Mukherjee should look to provide some relief to the SME technology firms in the Union Budget 2012-13.

"At present small and medium IT/Technology companies in India are reeling under the pressure of growing cost due to increasing wages of employees and higher operating costs due to factors like petrol price rise, growing interest costs and inflation. Growing USD rate is also making foreign business promotion expensive for them. Government should provide Tax incentives to SME technology companies as they create large employment opportunities in the country," he said.


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He further adds that for SME technology companies, taxation should also be made simpler to keep them competitive. Not only that ambiguous multiple taxation of VAT, CST and service tax should be simplified.

Commenting on his expectations from the overall budget he opines that it should look to boost the sagging economy. Khanvelkar recommends that to achieve this, the overall service Tax and excise duty rates should not be increased and GST should be introduced. "This will help the economy grow and in turn will also boost investor confidence in the country, making rupee more stable," he added.