The Hindu Business Line : `Service tax plan will hit consultancies'

THE move to withdraw service tax exemptions for professional fee received in convertible foreign exchange, which forms part of the provisions of the Finance Bill 2003, has drawn flak from the Madras Consulting Group, a provider of management consulting services.

The group's founder and Vice-Chairman of the International Council of Management Consulting Institutes (ICMCI), Mr G. Shanker, said that the proposal, along with the move to hike service tax by three per cent, would adversely affect the indigenous management consultancy profession.

The move to tax export earnings, Mr Shanker said, would blunt the competitiveness of indigenous management consultancy firms., including those providing market research activities and HR/recruitment services, in the world market.

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