ISA lauds positive signals of Union Budget

BANGALORE, INDIA: The India Semiconductor Association (ISA) today applauded the government’s step in extending the STPI tax holiday for technology export firms from March 2010 to March 2011. It would be of special relevance to SMEs.

Addressing the issues of transfer pricing and removal of fringe benefit tax were the other positive steps. These steps would attract talent to the knowledge sector and improve the competitiveness of India.

Weighted deduction of 150 percent on in-house R&D expenditure available to all manufacturing businesses will provide a boost to domestic R&D efforts and is a welcome move. Upgradation of polytechnics could create employment opportunities in the manufacturing sector with a pool of qualified and trained talent.

Basic customs duty of 5 percent applicable on import of set-top boxes is an incentive for domestic manufacturing. Reduction of custom duty on LCD panels and exemption of CVD on parts for mobile manufacturing will also help the manufacturing industry.

Commenting on the budget, ISA Chairman B.V. Naidu, Group CEO Vanpic Projects said, "These are positive developments and a signal that the government is committed to the growth of the sector and addressing its issues in this tough economic environment."