BANGALORE: New government led under Modi is to introduce the maiden Union Budget likely in the next month. The news seems to be a stir in the IT and ITeS sectors, and expect a reduction in Minimum Alternate Tax (MAT) and Dividend Distribution tax.

"In order to boost overseas shipments and domestic manufacturing from special economic zones (SEZs), the IT and ITeS sectors expect a reduction in minimum alternate tax and dividend distribution tax (DDT) applicable on such zones," Dun & Bradstreet India's Senior Economist Arun Singh said.

It was further acknowledged from the senior economist, that reduction of Special Additional Duty on computer equipments viz. chassis, memory and battery used by the computer/laptop manufactures. This abatement in the duty could promote nation’s manufacturing tendency and revitalize subdued demand.

Although the concept of MRP based valuation on IT products has increased heavy duties on them but on the contrary MRP abatement percentage for such products still abide to 20 percent.

“The current rates of excise duty, sales tax and other operating costs like logistics and dealer margins, take the total post-manufacturing costs over and above the abatement percentage in respect of IT products,” added Singh.

The present scenario is on serious verge of development issues, the abatement percentage increment is anticipated to get enhanced in the Union Budget 2014-2015. Finance Minister Arun Jaitley will present the Union Budget on 10th of July.