Thursday, July 16, 2015

Maharashtra IT policy offers firms tax, real estate benefits


Mumbai: Maharashtra, which ranks second in the country for exports of information technology (IT) and IT-enabled services, came out with a policy aimed at making the state an animation and gaming industry hub, attracting Rs.50,000 crore of investment and creating 1 million jobs in five years.
The policy, which offers many sops to the IT industry, was cleared by the state cabinet during its weekly meeting on Tuesday.
According to the policy document, Maharashtra’s last two IT policies—in 2003 and 2009—helped the state attract investment of Rs.3.24 trillion and create 748,000 direct jobs and 465 private and 37 public IT parks.
The new policy offers 200% additional floor space index (FSI) over the base FSI for IT parks. The FSI indicates permissible construction on any plot. By offering a higher FSI, the state government hopes rents in the IT parks will drop.
The policy also tries to promote a walk-to-work concept; it proposes the construction of integrated IT townships that will also offer residential apartments, social infrastructure such as schools, hospitals, malls, multiplexes and parks, among other things.
For such integrated townships in the Mumbai Metropolitian Region (MMR) and Pune, the permissible FSI is 2.5.
The current FSI, which determines the maximum floor area allowed in a building relative to the land on which it is erected, in these areas varies between 1 and 1.33.
The policy also simplified rules for payment of premium for getting additional FSI. If such additional FSI is consumed in MMR and Pune, the premium will be calculated at a flat 30% of ready reckoner rates and in the rest of the state it will be charged at 10% of the ready reckoner rate.
The ready reckoner is a document published by the state government at the beginning of every calendar year, which gives area-wise rates of properties and is used for charging stamp duty by the state government on property transactions.
The policy also offers various other sops to the IT industry, such as exemption from payment of stamp duty and electricity duty. It offers electricity to the sector at the industrial tariff, which is lower than what the commercial sector pays. It directs municipal corporations to charge property tax at the residential rate and not at commercial rates.
The policy also exempts the industry from value added tax and local taxes such as entry tax and octroi, among other things.
“Giving tax sops and higher FSI is a step in a right direction but what we need more is creation of physical as well as virtual infrastructure. It will help to grow the IT industry in the state at a much faster rate,” said Hemant Joshi, a partner at consulting firm Deloitte Haskins and Sells Llp.

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