<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p><p align="justify"><span class='dropthecap'>T</span>he draft direct tax code issued by the finance ministry has thrown highway developers into a tizzy. Their worry: the code might impact some of the tax sops given to the sector under the current Income Tax Act. Over the past few days, developers have been engaged in discussions with finance ministry and road transport ministry officials to make some changes to the code. The government has also appointed PricewaterhouseCoopers to give feed- back on the impact of the proposed clauses in the new tax code.</p><p align="justify">Highway developers and their subcontractors were given a 10-year tax holiday on projects under Section 80-IA of Income Tax Act. The new code proposes to remove the sop for subcontractors. </p><p align="justify">The finance ministry is expected to clarify its position on service tax on developers who build roads on build-own-transfer basis; it is also not clear whether there would be service tax on maintenance of roads. While the ministry is expected to study the revenue impact of extending some of the demands put forward, these tax-related issues have sprung up when the government is giving final touches to revised procedures to bid for and build highway projects. Hopefully, the ongoing parleys will resolve this taxing proposition.</p> <script type="text/javascript"> var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } </script> (This story was published in Businessworld Issue Dated 19-10-2009)