IT companies want government to release past dues to tide over coronavirus crisis

Categories: GST Recent News, News
No Comments

The Indian IT industry has asked to government to release payments, running into thousands of crores, owed to it over the years. The dues span refunds with various departments such as Income Tax and Customs as well as money from central and state governments for various technology projects. The move comes as the industry is facing liquidity constraints due to the Covid-19 virus outbreak that has led to the ongoing nationwide lockdown till May 3.

According to a study by industry lobby group Nasscom in 2017, the central government, as well as several state governments and public sector undertakings, owed close to Rs 5,000 crore for just technology projects to the IT industry. Industry experts, however, said the actual outstanding could be much higher. Nasscom has in fact taken up a survey of its member firms to arrive at a fresh estimate. There are close to 16,500 IT companies with a turnover of Rs 250 crore for whom refunds are critical for survival. The IT Industry Dues and Outstanding Payment Survey, initiated two weeks ago, will try to collate data from a large number of companies on all outstanding payments, said Gaurav Hazra, senior director India Markets at Nasscom.

“Once we have data about the outstanding across various government departments, states and PSUs, we will reach out to stakeholders where the bulk of the payments are stuck,” Hazra said. A large chunk of payments is stuck on projects where there is a deadlock between government enterprises and the IT vendor on project milestones, leading to invoices not being signed. “It’s probably the most ambiguous and humongous chunk of the payments,” he said. The survey is expected to make visible the consolidated dues and highlight the actual size and impact of the problem on the survival, competitiveness and jobs and livelihoods in the organized IT sector.

“Delayed payments, overdue refunds and outstanding dues are the biggest pain points of the IT/ITeS industry especially in the midmarket (SME) segments. Such dues and outstanding entangled with State/Central Government Organizations, Public Sector Undertakings (PSUs), larger private enterprises and regulators deprives the industry of a critical part of the stimulus needed at this time and seriously limits its ability to save more jobs,” Nasscom said in an email to members. “Timely release of overdue payments (Government and Private Enterprises), precious cash entangled and locked-up in the form of IT and GST refunds, unadjusted TDS, and Foreign tax credits can provide an immediate relief to the industry which is hit by an unprecedented liquidity crisis…,” it added.

Read More at: https://economictimes.indiatimes.com/tech/ites/it-companies-want-government-to-release-past-dues-to-tide-over-coronavirus-crisis/articleshow/75276920.cms

CLOSE
CLOSE