News Details  :

Internet Service Providers Association of India (ISPAI) on Friday urged Union Finance Minister Pranab Mukherjee to give tax sops to Internet service providers (ISPs) to help boost Internet penetration.



The association has also asked the government to ensure availability of cheaper personal computers.



In its representation to Mukherjee, the association has asked him to take measures that gave fillip to broadband services, which help in the growth of the economy and improve life through social applications, including tele-education, tele-medicine, e-governance, entertainment as well as employment generation by way of high-speed access to information and web-based communications.



The ISPAI has called for full tax exemption on computers, broadband customer premise equipment (CPE), including set top boxes, modems, wireless radios and routers, and exemption from customs duty on goods imported by ISPs for providing Internet and broadband access.



“A huge barrier to achieving the desired penetration of Internet in India is the cost of ownership of personal computers. While the government has rightly encouraged the lowering of prices of PC’s by extending tax benefits to the IT hardware industry, still most people find it expensive to invest in their own computers, which is essential to use Internet. The government should consider extending support to individuals by way of allowing deduction from personal income tax the cost of one PC,� said Rajesh Chharia, President of the association.



Similarly, corporations, whether public or private, should be allowed to give Rs. 9,600 per annum allowance to employees for broadband services access at home.



This allowance should be removed from taxable income for the corporation. The same facility should be extended to self-employed professionals and individuals. ISPAI has also demanded five-year holiday from service tax on Internet and broadband, he added.



The association has also said that the Centre should recommend to all State governments to waive VAT and sales tax on Internet and broadband services and classify it as ‘service’ not ‘goods’. It is an essential service and should not be tax lavishly.