VAT move on IT industry opposed

The Andhra Chamber of Commerce and Industry (ACCI) has opposed the move of the State Government to levy VAT on Information Technology (IT) industry.

ACCI president M. Rajaiah expressed the view that the proposal might lead to negative growth and the tax holiday in IT industry should continue for at least three more years as the industry was facing competition from China.

Stating that the cost of operations were also going up, he recalled that the branded software was already covered by VAT, minimal alternative tax, service tax and tax on employees stock options were also being collected.

The ACCI president urged the State Government to immediately withdraw its proposal and take the necessary steps for promoting IT hubs in three-tier cities like Visakhapatnam, Vijayawada and Warangal.