India opposes US law to impose tax on foreign procurement

New Delhi, Dec 30 (PTI) Indian Government Thursday said
the recent US legislation imposing a two per cent tax on
foreign procurement and extending the present visa fee till
2015 will create a bias against the Indian IT sector.
The US government has recently passed a bill --James
Zadroga 9/11 Health and Compensation Act-- that will impose
two per cent tax on the US government procurement from foreign
companies and also extend the present visa fee on certain
categories by one more year from 2014 to 2015.
Terming the new law as a "retrograde" step, Minister of
State for IT and Communication Sachin Pilot said "such
legislations will only seek to undermine the contributions of
the Indian IT and tech companies to the US. It will create a
non-level playing field for the Indian firms"
The law has caused considerable concern and apprehension
to the USD 60 billion Indian IT industry, which gets over 60
per cent of its business from the US.
The James Zadroga Act, following the Border Security Law,
is likely to impose an additional USD 100-200 million burden
on these companies.
Pilot said the government has already taken up the issue
with the trade representatives in the US.
He will also hold meetings with the executives of Indian
IT firms in January
The minister said the US should not discriminate against
the Indian IT sector as the top 6 Indian IT companies alone
have created some 35,000 jobs in the US.
In August, the visa fee hike, under the US Border
Security provisions, was valid till 2014.
Incidentally, the move comes after both countries agreed
to reduce trade barriers and abjure protectionist measures for
facilitating greater movement of professionals and investors
during the recent visit of US President Barack Obama. PTI PML
PBL


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