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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."
When the British empire controlled India, they levied a small tax on the production of all salt in the country. It was not that the government made much by this tax, nor was it that the people were burdened by it. But india ran on salt, and by taxing it the British controlled it. It was for this reason that Gandhi lead a march to the sea to do the very simple thing of making salt in oppisition to british rule.
When I read that a government that was created by the power and witness of such acts now wished to tax the production and transmission of light, It makes me wonder if they have even read their history.
JFMILLER
Strive to make your client happy, not necessarly give them what they ask for
Yeah but the problem with electrons is that you aren't buying them. All you are doing is renting them. Once you have finished using them you send them back to the provider. So in that way photons *are* different.
I'm not sure of the Indian taxation system, but I would guess that a consumer is already paying the government for the privelage of getting electrons in the first place, which will then be used to turn the photons into useful information. This would smack of double taxation. But hey, the Australian government is happy doing this as we can pay government mandated GST on top of government mandated stamp duty.
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This article is inducing some serious cognitive dissonance for me. I find this article seriously disturbing.
Taking the taxman's position in this article, one could impose the VAT on cellular telephone providers as they are doing the same thing, exhanging money for a specially encoded form of electromagnetic radiation. That's right - the only difference between visible light and radio waves is the frequency. You can not hold visible light in your hand just as you can not hold any EM waves.
And FM radio gives their radiation away for free...must be communists or something
"Physics is to math what sex is to masturbation." - Richard Feynman
Like India REALLY needs more government interference and disincentive to investment.
When will people learn that you get less of what you tax more? Good news for all those US and European workers worried about losing their jobs to offshoring! India is shooting themselves in the foot.
This sounds reasonable and ingenious.
Insidious, maybe. But "Buying Light" suggests it's only unidirectional, what's really happening is you're exchanging light, with a net of 0.
A feeling of having made the same mistake before: Deja Foobar
The fiberoptic light energy is a *free* service, available to anyone without charge.
However, if you would like the ISP to modulate some well-timed *dark* spots in the line for the purposes of data transmission, *that* is going to cost you.
Since darkness (the absence of light) can't be defined as a product, no VAT.
Problem solved.
No, actually, it's more like the US government reclassifying ketchup as a tomato and therefore giving schoolchildren their "daily requirement of vegetables" in public school lunches that consist of a corn dog, some ketchup, and potato chips.
In other words it makes no sense at all but they did it anyway (under Reagan).
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
100 million people dead by government action. That's progress!
This is one of innumerable instances where the bureaucracy (or an unbelievably numb part of it) will reclassify something at a whim and want to tax it. The motives are many - revenue to the exchequer, corruption, or just plain sadism.
You've got to meet some of these revenue officials to realize what absolute crud they are actually.
It should be clear to anybody having the slightest knowledge of business transactions and indirect taxation that the ISPs are not selling light energy, they are just providing data communication service. If we go by their logic, they would start levying VAT on the electrical charge in phone lines, microwaves for cellphones, radio waves, God knows what else.
And as the value of the 'goods' being sold is much higher than the input cost, namely electricity, the value added could be computed as a major chunk of the rental/data transmission charges unless allowed to be set off by connectivity expenses.
Oh well, not everyone in India has to worry about this, the tax is being assessed only in Karnataka, where Bangalore - and its most notorious, useless products are located. In a sense, it is moving forward quicker to the planned unification of VAT and Service Tax under GST. More power to you, o techie!
-clueless
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