IAMAI Seeks Tax Sops In The Forthcoming Union Budget

This could be a good step if the government obliges. The Internet and Mobile Association of India (IAMAI), the apex association of Indian online and mobile companies as the name denotes, has recommended to the finance ministry a five-year moratorium on payment of service tax on internet advertising revenues. IAMAI has sought the sops to be included in the forthcoming budget, which will be presented on February 28.
Every year before the Union Budget, industry associations of all hues meet the finance minister and key officials to lobby for their industry’s demands. So IAMAI also submitted its recommendations which included the demand for the withdrawal of service tax on online, besides the demand for a waiver of service tax on transactions done through credit cards, debits cards and net banking.
It’s rather strange that the government has put fiscal pressures on the fledgling online industry which actually needs some kind of handholding for a few more years. End of the day, the industry is too small for the government to rake in revenues.
But I am not sure if P Chidambaram, the finance minister, would oblige since the service tax on online ads and transactions was instituted only last year. He may wait for a year or two to review the impact.

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