Indian ISPs Taxed for Generating "Light Energy"

CaptKeen writes, "The Hindu is reporting that the Indian Government is trying to tax optical broadband providers (think fiber to the premises) for generating 'light energy.' According to the Commercial Tax Department, optical broadband providers operate on light energy which is 'artificially created and sold to customers for the purpose of data transmission and information.' This classification would make Internet access goods (since you are buying light) as opposed to service — and would be subject to a 12.5% VAT."

Comments

This may be an Indian "April Fools"

[mbone]

as I understand that 10/10 is the equivalent for them.

Re:This may be an Indian "April Fools"

[OmnipotentEntity]

News to me and to wikipedia. http://en.wikipedia.org/wiki/October_10

Re:This may be an Indian "April Fools"

[timeOday]

So the bottom line is that governments have always been willing to redefine terms and just make stuff up when it helps generate tax revenue.

It's the government. If they want to tax it they can, unless they are voted out of office. The only thing I don't get is why try to rationalize the tax with this weird explanation? Why not just say "we need more tax revenue and are extending VAT to information services"?

Re:This may be an Indian "April Fools"

[Eccles]

In case you didn't check the edit history, that line was *just* added. Wikipedia vandalism just to support a slashdot posting, that's a new low.

Tomato

[aralin]

It's like the US government reclassifying tomato as a vegetable so it can impose the import tarif on it. Governments always look for ways how to tax the hell out of you. Nothing new here. Move along.

Re:Tomato

[bdleonard]

That tomato you're thinking of is a fruit

Re:Tomato

[jfengel]

The tomato is botanically a fruit, since it contains the seeds. But fruits are taxed differently from vegetables, and since the tomato is treated more like a vegetable than a fruit in cooking, it took the Supreme Court to decide that this fruit was in fact a vegetable. (Presumably the same applies to squash, which are nearly identical to watermelons botanically; the latter is eaten as a fruit and the former as a vegetable.)

But if we genetically engineer them to put the RSA code on them, then I guess they'd be a munition. They're also good for throwing at bad actors.

India already has service tax !

[alphabetsoup]

I am an Indian and I have no idea what the government is trying to achieve by this. India already has a tax on services, at 12%. How would changing the classification from goods to service help ? The tax revenue will be increasing by just 0.5%.

In any case, this is being done only by a state government, so its valid only within that particular state. It will have no effect on any other parts of the country. And I expect this to be struck down by the courts anyway.

Lawyers

[iendedi]

How about Lawyers and their "Sound Energy"?

Well I'm happy things haven't changed since I left

[gsn]

Clearly, this entire comment page is a failure to understand the Indian mindset.

Really what happened is the company (Airtel) didn't bribe some politician or offended one in some manner (such as an employee of the company playing his music too loud next door, or the company CEO refusing to let the politicians layabout son marry his daughter or some such, or indeed because the politicians astrologer told him it would be beneficial if he put shani in the 4th house of Airtel...).

Clearly Airtel is in the deepest shit because

"While the assessment on Airtel was completed and a notice issued to it for alleged tax evasion during the year 2005-06, no assessment has been concluded on other OFC broadband providers," A.K. Chitaguppi, Deputy Commissioner of Commercial Taxes, said.

Ahh the Chitaguppis of this world are getting upitty these days.

The problem will go away when either Airtel does bribe said politico or this goes to court for ten years and lawyers bicker back and forth using words that do not mean what they think they mean, and it dies a nice peaceful death. Or the politician does.

In the event that this is the tax department trying to be "creative", I'd points out that cellular providers, radio providers and indeed basically any device that has a counter (your speedometer for instance)that you look at uses photons to transmit data to your cellphone/radio/eye. Ofcourse just imagine the increase in revenue if they taxed all those devices. Or argue that light is energy and Airtel (might be) is paying for their energy and simply changing energy from one form to another is a perfectly dull thing to do and is all allowed by this lovely little principle called conservation of energy.

Also for your general light entertainment (hyuk hyuk) have a song.

Re:100 phothons please

[stony3k]

Where are my mod points when I need them? The parent poster is absolutely correct. If the Indian tax department goes ahead with this tax, it will stifle the fledgling broadband industry (and in turn IT industry).

However I'm pretty sure this rule was created by some over-zealous bureaucrat and it will eventually get removed. Unfortunately bureaucrats in India (and elsewhere) tend to pretty stupid.