Bengal wants tax sops to stay for IT SMEs

At a time the Left parties are confronting the UPA government over the civilian nuclear deal with the US, the Left Front government in West Bengal has sought from the Centre an extension of tax sops for the software industry.

The West Bengal government wants the tax rebate given by the Central government on software be continued for a few more years for small and medium companies. The incentive is scheduled to end in 2009.

West Bengal is perhaps the first state to raise this demand, which is already a major concern of the IT industry. West Bengal IT Minister Debesh Das met Telecom Minister A Raja on Monday and submitted a memorandum in this regard. Das said Raja agreed to soon take up the matter with Finance Minister P Chidambaram.

"Big companies like TCS and Wipro are adopting the SEZ model to retain the tax incentives. Our concern is for the small and medium sector. Most of them will not be able to benefit from SEZs," Das told Business Standard.

In the memorandum, the state argued that small and medium companies created bulk of the jobs in the IT sector and any tax holiday would eventually boost the industry and its employment generation capacity in a big way.