TDS googly for domestic IT

NR Panicker, chairman and CEO, Accel Frontline, shared, since Indian market has not seen much growth this year, the company will focus on overseas business in the coming future.

A major part of the growth in India’s economy is credited to the technology sector. After the global economic slowdown hit the Indian market, it affected businesses within India and also the growth rate of Information Technology (IT) sector.

While speaking to The DQ Week, Panicker also raised concern over interpretation of tax deducted at source (TDS) on software products as there is a major problem on cascading of the TDS for companies. He said: “The major problem which is preventing industry from generating growth is TDS policy of the government. If one is not making 10 percent of profit, then why is the government imposing 10 percent TDS.”

Further explaining on Accel’s future developments, Panicker said that the company is keen to expand its business in other countries as 70 percent of its revenue is generated from overseas.

He said,” This year by now we have already added four to five clients from the US and we are looking forward to explore new verticals and aggressively tapping global market as we are on the path of growth right now.”

Earlier, Panicker told The DQ Week that Accel will expand its operations to Singapore while the company has its presence in Dubai, San Jones, and Tokyo.

“Next financial year will be a bit critical for us as we have plans to expand in neighbouring countries as well and we are hoping to add some big names in the forthcoming days,” he added.

Asked about the implementation of the much talked about cloud infrastructure services, Panicker said: “Cloud is an essential application and we at Accel do provide cloud services. Cloud is a future, we all are aware of it and we know that we have to work towards it.”

Coming again on the topic of troubled IT industry, according to a report, the Indian IT software and services industry which has seen Compounded Annual Growth Rate (CAGR) of 30 percent over the last three to four years has come down to a growth rate of 20 percent.

However, Gartner recently released a report in which it has projected India IT spending to total $71.3 billion in 2014, a 5.9 percent increase from the $67.4 billion forecast for 2013. The report also projected that IT services in India will record the strongest revenue growth at 12.1 percent.

Speaking on the current condition of IT industry, Panicker said, “Business is present in India, but the issue is running the business successfully which is proving to be a difficult task for us at the moment.”

However, despite the IT and IteS has been demanding more clarity on TDS on software and other issues like dual levy of VAT and service tax on domestic software sales, Panicker hoped to see a positive growth in the coming years if only the government paid heed to their concerns.

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