Information Technology Companies in the country have been adversely influenced by the changes in reform policies (note ban and GST) at National and International level. After the stringent decisions taken by US President Donald Trump on IT companies, along with Demonetization effect and GST implementation altogether have pushed IT companies towards recession. Recently started SEZ units of Infosys and TCS in Indore have been negatively influenced by these policies. Both of these companies had promised to provide employment to the youngsters in Indore. Due to the recession, it seems that they have to shut down their SEZ units. TCS has not yet started the work in Madhya Pradesh whereas Infosys has shut down the unit soon after starting the work.
High GST Rates
Information Technology Companies which includes website designing, app designing and mobile app development are liable to pay 18 percent under the new indirect tax reform. Due to high GST rates, the companies are facing problems and their business is declining continuously.
Manish Panchal, Director of Impetus Information Technology (IT) Company said that due to high GST rates and changes in international policies influencing the business activities of IT company, the profit margin of the IT companies have been very low. Lakhs of rupees are being taxed on one project which enhances the overall cost of the project, which in turn adversely affects the salaries of employees and the profits of the project.
Infosys and TCS SEZ Units Closed Down in Indore
Recently started SEZ units of Infosys and TCS in Indore has closed down due to the recession in the market. These companies have put the career of thousands of professionals at risk. Infosys had promised to provide employment to thousands of people and preparations were going on.On another hand, TCS neither started its business in Indore nor gave the job to people.
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Both Companies Neither Invested Nor Gave Job to the People
According to the data of Divisional Commissioner, SEZ Indore, it is clearly identified that IT companies in India are lagging behind and trying to avoid investing in new projects. Both IT companies, TCS and Infosys which were occupying 230 acres of land on the superior corridor in Indore, neither invested in new projects nor provided employment to the people. According to SEZ rules, both of these companies had to start their operation in March this year. Even, TCS had not started its work in Indore whereas Infosys had done some work and very soon closed down its newly started SEZ unit.According to the Balance sheet of August, the turnover of TCS is zero whereas the turnover of Infosys remains same as it was in the first month i.e Rs 3 lakh.
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