If you have an Indian supplier supporting your business, chances are that your supplier is taking advantage of the STPI (Software Technology Parks of India) and SEZ (Special Economic Zones) schemes. These provide certain tax incentives to qualified companies–effectively lowering their cost of doing business and allowing more competitive pricing. On February 28, 2011, the new Indian Union Budget was presented to the Indian Parliament. Although the budget includes numerous changes relevant to businesses operating in India, certain tax-related provisions may limit the benefit of these structures in the near future.
For more information, please see the Pillsbury Client Alert.