Business Process Industry Association of India

Recognition of the Business Process Industry ("BPI") as a separate Industry from the IT Industry as BP units in India has a very significant contribution in terms of economic value creation and generation of employment opportunity.

Setting up of a separate Business Process Ministry in the Government or reclassification of the ministry to the Services Industry Ministry with special Telecommunication, BP and IT Departmentsso that BPI can also be nurtured and focused upon.

Extension of tax holidays for BPI STPI units for 20 more years so as to maintain its pace of progress. In the past three years, the BP Industry in India grew at a CAGR of 39 per cent. As per the latest NASSCOM survey, exports from BPI rose by 33 per cent to US Dollar 8.4 billion in FY 07.

Withdrawal of MAT for initial 5 � 10 years for new upcoming BP units so as to encourage the new business ventures.

Abolition of FBT on ESOPs as these would discourage BPI in extending such staff welfare benefits and inclusion of key management into its shareholding.

Introduction of advance pricing arrangements for transfer pricing. The transfer pricing arrangements should be modified in the following ways:
- There should be transparency on the method chosen by the department
- The Transfer Pricing department should only benchmark intra-industry.
- Transfer Pricing Department must link increase in margins only on standard national profitability indices.

Simplification and transparency in tax holiday provisions to make them Industry and Entrepreneur friendly and easy to implement.

Additional tax sops to offset the losses incurred due to the appreciation of rupee in line with the tax sops given to the Manufacturing Industry Sector / Goods Exporters / IT Industry as BPI contracts are long tenured and cannot easily be renegotiated. Moreover, client replacement and process migration takes almost 6 to 9 months thereby making it inflexible and impractical to change contracts / clients and thereby continuing under the burden of existing loss making contracts.

Tax sops for the fast growing Domestic BPI segment, which is generating huge amount of employment opportunities and is capable of generating high levels of employment in tier 3 - tier 4 cities and in remote towns and villages which other services segments / sectors are not capable of doing.

Service tax should be completely withdrawn from BPI because:
- The International segment of BPI are exporting their services and not able to take any benefit of setting off the Input Service Credit.
- With the introduction of Service Tax on rent and other services, huge amounts of working capital are blocked with the department and it is extremely time consuming to get refunds of the Service Tax.