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DoT bats for service tax waiver to Internet companies

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Abhigna
New Update

NEW DELHI, INDIA: Here is good news for Internet Service Providers (ISP); indigenous telecom equipment producers; and Smartphone and tablet vendors.

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India's telecom department (DoT), according to sources, is mulling abolition of service tax on the Internet services. This move, will however boost the business interests of Internet companies which under perceive the Internet opportunity within the country.

In a proposal to the Commerce Ministry, DoT, citing the government's ambition to reach 175 million Internet connections by 2015, said that 12 per cent service tax on Internet firms should be abolished in the 2013-14 Union Budget.

The department also said that in line with the infrastructure status Internet should also be considered. "Telecom services such as Internet should get benefits under Section 80 IA of the Income Tax Act (a 100 per cent tax holiday for l0 years in a block of 20 years) as applicable to other infrastructure sectors," it said.

DoT has however, also demanded similar waivers for domestic manufacturers of telecom equipment. It recommended 10-year term tax holiday benefits for the makers of telecom gears and mobile device manufacturers in India.

In addition, the department also seeks consideration of Smartphones and tablet PCs as employee tools, and suggested due rebates similar to PC workstations and laptops, under existing framework.

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