This budget has not brought any good news for the Indian outsourcing industry. In the finance budget presented the export revenue of a number of Indian outsourcing companies was brought under the tax scanner and this seems to be the first measure by the government for bringing down the tax benefits to these companies.
Reacting to this, N. Ramachandran, CFO, iGATE Global Solutions stated:
Prices that outsourcers charge their customers are unlikely to go up as a result, but profit margins will be affected.
Before the budget the Finance Minister of India had stated that incomes under tax exemption would now be covered under the minimum alternate tax or MAT. A number of other tax issues are expected to trouble the Indian outsourcing industry which is already facing competition in the wake of other countries offering their services at low prices. It seems Indian outsourcing industry has a tough time ahead.
Via techworld
