Top News

IAMAI calls for income tax exemption for internet and mobile service providers

Internet and Mobile Association of India has called for tax exemption under Section 10(A) of the Income Tax Act for internet and mobile service providers, mobile value added services providers and transaction providers on internet and mobile platforms. In its pre-budget memorandum, IAMAI has said that unless incentives are given to the digital content providers and VAS industry, broadband penetration will not take off the way it has been envisioned by the government.

Internet and Mobile Association of India has called for tax exemption under Section 10(A) of the Income Tax Act for internet and mobile service providers, mobile value added services providers and transaction providers on internet and mobile platforms. In its pre-budget memorandum, IAMAI has said that unless incentives are given to the digital content providers and VAS industry, broadband penetration will not take off the way it has been envisioned by the government.

Subho Ray, president, IAMAI, has said, “The income tax exemption granted software and telecom sectors have ensured that they have the necessary government support to scale up and achieve global size. A similar measure is needed for the digital content providers to ensure that e-penetration takes off in India and we have large successful companies that will carry forward the India brand.”

Among other suggestions, IAMAI has also sought a five-year moratorium on service tax on online services and online advertising industry under Section 65 of the Income Tax Act. It believes that the moratorium will allow this nascent industry to grow and stabilize. Small and medium enterprises (SMEs) depend on the digital medium to access domestic and international market. IAMAI believes that the additional burden of service tax will adversely impact the growth of this sector.

“Five year service tax moratorium as opposed to the stimulus package already put in place by the government will go a long way in aiding the SME sector to grow and access new markets. It may be noted that SMEs comprise about 40-50 per cent of the industrial output and any fiscal incentive will help them tap newer markets and use the digital medium better,” Subho Ray has added.

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Close