DPIIT, revenue dept weigh options for tax relaxations to startups: Official
New Delhi, May 30: The revenue department and DPIIT are working together to see what more relaxations can be given to startups under direct and indirect tax regime with a view to promote budding entrepreneurs, a top government official said on Saturday.
Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Guruprasad Mohapatra said that they will be submitting a comprehensive vision document for startups to the Cabinet, which has proposed series of steps.
Talking about the host of measures on which they are working, he said the DPIIT will be extending more funds this year to startups under the Fund of Funds scheme. It has provided over Rs 1,000 crore last year.
“Right now the taxation team of department of revenue and startup India team from DPIIT are working together to see what further relaxations can be given in the direct and the indirect tax regime. We are also trying to provide marketing support to those startups who are into manufacturing by providing them space under the public procurement scheme of the central government,” Mohapatra said.
He was speaking at Rajasthan STRIDE virtual conclave, which was organised by Secretary in the Department of Science and Technology, Government of Rajasthan Mugdha Sinha.
Mohapatra said the key elements of the startup India vision documents include increasing Fund of Funds, seed money scheme, credit guarantee scheme, and making it mandatory for all departments to promote incubators and hand-hold startups.
“What we are trying to do is to make things simpler for them. We are now thinking to start a seed money kind of a concept for those startups who come from a ideation stage to a proof of concept stage.
“There are some schemes for seed money in some states, and some departments in central government like biotechnology. But, we want to make it a national scheme to bring such support for the startup community,” the secretary said.
He also said that credit guarantee is a major problem for availing credit for startups, so the department is working on an initiative, which will give some sort of credit guarantee to startups when they approach lending institutions for either working capital or capex requirement.
On Intellectual Property Rights (IPRs) front, he said the IP office in Mumbai has given an ambitious contract, which is based on AI (artificial intelligence) to examine duplication of patents and other things.
“Work has started on this and I think in another couple of months, you should see significant benefits on AI based IPR solutions, where one can find out which startup has received what patent and whether that startup can be approached for the commercial use of that patent or not,” he added.
So far over 2,000 startups are recognised by the DPIIT alone as the department has taken several steps to strengthen startup ecosystem like extending income tax benefits, and process simplification.
“These are the broadly initiatives that we are working now for startups,” Mohapatra said.
Moderating the session, Sinha said that convergence among various departments on this sector is the need of the hour.
“Rajasthan government is also taking several steps to promote startups and ease of dong business,” she said.