Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: cpt :: due date for vat payment :: VAT Audit :: Central Excise rule to resale the machines to a new company :: form 3cd :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4%
 
 
General »
 Simplified one page Income Tax Return Form: Changes to keep in mind before filing tax return for AY2017-18
  No proposal to replace Income Tax with Banking Cash Transaction Tax
 GST coming July 1 despite calls for delay: Revenue Secretary Hasmukh Adhia
 Centre introduces provision of taxation on NPS in Income Tax Act
 Income Tax Department Clarifies On Cash Withdrawal From Banks, Post Offices
 The Goods And Services Tax (Compensation To States) Bill, 2017
  Goods and Service Tax (GST) and Real Estate Sector
 New Income Tax Rules On Home Loan Come Into Effect
 Here's how late filers can save on stress and taxes
 Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib ?Kalyan Yojana, 2016
 Companies should invest in upgradation of tax technology

Tax relief notice for new telcos
June, 13th 2009

The Indian telecom market has emerged as one of the fastest growing in the world. India's subscriber base has crossed 440 million and telecom operators are adding a whopping 8-10 million new subscribers each month.

Having said that, there is still substantial scope for further growth in this sector considering that teledensity is only 37% in India. The telecom industry is keenly awaiting the Union Budget, to be presented by Pranab Mukherjee, hoping that it would address some of the long standing issues adversely impacting this sector.

Discussed below are key pain points of the telecom industry from a tax perspective:

The telecom industry is subjected to a host of taxes/levies including service tax, license fees and spectrum charges and state levies such as octroi, VAT, stamp duty, entry tax, etc, apart from corporate income-tax. All of this aggregates to around 30% of their total revenues! The long-standing industry expectation is the rationalisation of the multiple levies into a unified levy, which would relieve the telecom companies of compliances under multiple regulations as also from the spate of litigation surrounding these levies.

Telecom operators were eligible for a tax holiday (u/s 80IA of
the IT Act) on their telecom revenues for 10 years, for operations commencing prior to March 31, 2005. The tax holiday should be  re-introduced to provide a level playing field to new players. Also, in 2007, the government enacted a provision denying tax holiday to undertakings, post transfer, in a merger. The denial of tax holiday should be done away with to enable tax efficient M&A activity in this space.

There is an on-going controversy on whether SIM cards sold by telecom companies through distributors and whether value-added services are exigible to service tax or VAT. A specific clarification is called for to settle this controversy.

Excise duty paid on equipment is allowable as a set-off against service tax liabilities only if the equipment is installed in the company's premises. Most of the telecom equipment (such as towers, routers, cables, modems, handsets, etc) would be located outside the company's premises, disentitling operators to the benefit of the set-off. The Budget should introduce specific provisions enabling such set-off.

Affordability with quality has been the hallmark of the Indian telecom success story. Prudent fiscal legislation and administration would definitely push the growth to greater heights in India.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Company Overview

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions