HYDERABAD: The Andhra Pradesh Government plans to bring products in the information technology sector too into the tax net.

It has appointed a high-level committee, headed by K. Ratnaprabha, Secretary, Information Technology, to look into the issue and suggest guidelines to be adopted for tax levy on software products.

The committee has been asked to interact with the IT industry before finalising the guidelines within the framework of the Supreme Court's judgment on the issue.

Disclosing this after Chief Minister Y. S. Rajasekhara Reddy reviewed activities by Commercial Taxes and Excise Departments at a meeting here on Wednesday, Commercial Taxes Minister K. Ramakrishna said IT sales, including exports, were not being taxed now. This enormous potential would be tapped for funds.

The meeting decided to seek an enhanced share of 50 per cent from out of Central service taxes in the light of the Centre's decision to phase out CST in the States following introduction of VAT. At present, States are being given only 30.5 per cent share out of the CST collections (Rs. 48,000 crore annually), the Minister said.

Offer to industries

Mr. Ramakrishna affirmed that the Government had no plan to change the present VAT slab rates but offered to reduce the rate to 4 per cent from 12.5 per cent on "industrial [manufacturing] inputs if the industry came out with a plea after identifying these products."

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