Friday, January 7 2005 22:01 Hrs (IST) - World Time -

Bangalore: The Karnataka Government has lifted the special entry tax on software, hardware and electronic goods for export oriented and STPI registered IT companies, but retained the 13.8 per cent levy on these goods for the domestic IT market.

"Responding to the appeal of the IT industry, the State Government has fully exempted the special tax on entry of certain goods by an importer, who is a Software Technology Park unit, 100 per cent export oriented units, electronic hardware park unit on entry of electronic goods, computers, peripherals and software," an official statement said in Bangalore today (Jan 7, 2005).

Commercial Taxes department commissioner Ashok Kumar Manoli said a notification was issued by the State yesterday on lifting the levy.

He said the notification stands as it states and had not mentioned about the lifting of the special entry tax, imposed in the State budget for 2004-05 with effect from October 2004, on computers, software and hardware for the domestic sector.

Software major Infosys immediately welcomed the Government's move and lauded Chief Minister Dharam Singh and Deputy Chief Minister Siddaramaiah for their "responsiveness".

"The Karnataka Government has responded very favourably to the requests of the IT and BT industry in reinstating the exemptions," Infosys MD and CEO Nandan M Nilekani said.

About 23 goods were lifted by the special entry tax soon after it was levied in addition to the 4.5 per cent entry tax following an outcry by industry bodies.