IT sector seeks lower power and stamp duty

NEW DELHI: The IT hardware and electronics industry has asked for state-level reforms to facilitate investments in the sector. Some of the suggestions include stamp duty exemption and relief from electricity duty.

The proposals aim at reducing land acquisition and energy costs of manufacturing firms. Industry representatives such as Manufacturer Associations of Information Technology (Mait) and Electronic Industries Association of India (Elsina) have asked for stamp duty exemption and lowering of property taxes at par with residential rates. To reduce the cost per unit of land and to increase potential of machinery, the industry has also sought doubling of floor space index (FSI).

While addressing the impact of energy rates on the total costs, the industry has proposed that the units running on continuous power be exempted from electricity duty. Industry representatives have also asked for power supply at industrial rates.

“Since most manufacturing hubs are energy intensive and are competing with low cost economies, the energy rates must be close to global industrial rates” Elsina principal secretary Rajoo Goel said. The industry has also suggested that for continuous power supply, the states must also facilitate captive power plants that could be jointly funded.

Some of the other proposals include revisiting the labour laws to promote flexibility in hiring employees. To facilitate movement of goods among states, the industry has asked for exemption from payment of octroi tax. With a view to uniform VAT rates in the country, the industry has asked state governments to fix VAT at 4%. “Such incentives are needed to create an eco system for the investments being made by manufacturers in their states,” Mait president Vinee Mehta said.