Nasscom seeks slew of relief measures for IT sector

Bengaluru: IT industry lobby group Nasscom has sought a slew of relief measures, including an extension of the Sunset Clause for units operating in Special Economic Zones (SEZs), to tide over the impact of lockdowns imposed globally to counter the Covid-19 pandemic.

Nasscom urged the government to extend the Sunset Clause by one year in order to ensure that SEZs continue to attract investment and contribute to exports and employment generation.

The industry body, which represents the $191 billion information technology sector, also said expenses incurred by companies for enabling employees to work from home should be considered as eligible business expenses.

IT companies should also be allowed to set off past unutilized Minimum Alternative Tax (MAT) credit even if companies opt to move to the lower tax regime of 22%, it added.

With respect to small and medium-sized businesses, Nasscom requested governments and public sector businesses to release pending payments to them in the next 15 days and defer payment of advance income tax in the first quarter.

It said that 80% of its members were small and medium-sized businesses, which need liquidity to sustain themselves through the crisis.

“Large part of the industry who do not own infrastructure will need help for the next 3 months with rentals to be absorbed by a Government fund as everyone is working from home. Only a few large companies have their own campuses and big balance sheets,” Nasscom said.

Business process management, global competency centres and parts of the IT Industry were operating at a maximum 70% capacity utilisation, it said.

To prevent job losses, the government must allow employees on reserve (called bench strength in the IT industry) to be paid only the minimum wages along with statutory entitlements, it said.

The Indian government should also introduce a furlough scheme like in the UK where companies can furlough those employees who are not on projects, for say, 3 months (no salary, but on the rolls of the company) and bring them back on the rolls at the end of that period.

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