On Monday, Union Finance Minister Nirmala Sitharaman, said that she would look into bottlenecks that push SaaS companies to register outside India.
Sitharaman interacted with industry representatives from CII and FICCI, where she heard requests and took feedback from various sectors. Entrepreneurs from Tamil Nadu, a hub for the SaaS sector, urged the Finance Minister to look into issues that may hinder IT products which are set to lead to value creation, a report by TOI.
The founder of Kissflow, Suresh Sambandam, said that with a $1-trillion opportunity, the SaaS sector can play a key role in the government’s ambitions of reaching a $5-trillion economy. India, however, is losing out on wealth creation as entrepreneurs prefer to register the companies outside India due to various bottlenecks. “Despite the changes in the business models, on the taxation front, software is still treated as a consulting service and TDS is being levied on sale of essentially a product and I requested the finance minister to look into it. The legacy system of filing ‘softex’ (software export) forms for assessing the value of software also needs to be done away with as prices are transparent on the websites,” he said.