business process outsourcing

India's export-oriented enterprises such as in the thriving software outsourcing industry were brought back under the tax net in the annual federal budget unveiled on Wednesday. Finance Minister Palaniappan Chidambaram proposed to extend minimum alternate tax (MAT) to firms claiming deductions under sections 10A and 10B of the Income Tax Act.

Now, they must pay the minimum tax, still lower than a full-fledged corporate income tax, practically seeing an end to their tax holiday status conferred years ago.

Software exports registered growth at a CAGR of 47% during last five years

- Exports from STPI units (Software Technology Park in India) in Gujarat registered growth at a CAGR of 47% during last 5 years.
- The STPI in Gujarat has 295 approved units, accounting for 5% of the approved STPI units in India.
- Total sales (exports & domestic sales) of USD 41.5 Million in 2004-05 by Gujarat based STPI units.