No. Yes. No … But, service tax for ISPs is on

NEW DELHI: Close on the heels of Budget 2001 tabled yesterday, a minor

controversy has erupted among the ISPs in India on whether they will be charged

service tax at all. But, laying the doubts to almost a complete rest, VSNL

director, operations, Amitabh Kumar, commented to this reporter, "It is

certain that ISPs that are providing leased line Internet services will be

charged service tax. It is also clear that dial-up Internet access will not come

under the purview of this tax."

Yesterday, the finance minister had proposed a service tax of 5 per cent on a

group of communications and information services. Till a few minutes back, many

ISPs had not ascertained the full impact of the budget. The actual impact on

end-users is likely to get concretized only when the ISPs get these doubts fully

cleared. Service tax on leased line services provided by ISPs could basically

translate to a higher tariff on the Internet leased lines of corporate users and

organizations.