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

The hell?

[The MAZZTer]

Did Senator Stevens move to India or something? Internet access is definitely a service. When you buy FTTP, it's definitely NOT for the light that goes through the wires. You're buying it for the data that the light transmits. You're buying it for the access to the internet. Most people won't even care how that data gets to their PC.

Attempt to re-distribute the wealth?

[pauljuno]

I'm curious as to whether or not this isn't an attempt by the Indian government to try and help re-distribute the wealth to a degree. My understanding is that there is a growing urban/rural conflict emerging as the elites in the major urban areas are growing wealther and wealthier due to outsourcing by wealthier nations to India and the rural areas continue to be rather impoverished. So the net impact on the populace is only going to be really hitting the urban areas and the new tax revenue could be used through-out the country. Not saying I like the idea of this tax, I'm just speculating on what could be the root idea behind it.

I'm from India , and I'm getting sick . . . . . .

[aneeshm]

. . . . . of this government's incompetent bungling . We have probably the best educated prime minister in the whole world , but thanks to political considerations ( a coalition of a centrist party and the communist party is ruling at the centre currently ) , he is not enjoying the freedom to enact reforms he deserves . He is the guy who started the reforms process in the first place , and brought India's economy into the modern world in 1991 .

Then there was the internet censorship scandal - the censorship continues till this day . Then there was the retarded idea to introduce fixed quotas for the Other Backward Castes in educational institutions - this means that only a OBC people can fill 25 % of seats in educational institutions - even private ones ! - even if they are unqualified , and if a sufficient number of them do not apply , then that seat remains vacant . Then there was the media censorship issue - there was a plan , thankfully scuttled , to ban The Da Vinci Code ( the movie ) because it "offended Christian sentiments in India" . And , of course , we have their lacklustre management of the economic scenario ( what else can you expect when the Communists threaten to withdraw support ( and thus make the government fall ) every time somebody tries to implement some reform ? ) .

I'm very definitely not voting for this lot . I was too young to vote in the last election , but in the next one , this bunch is definitely OUT .

Interesting question, philosophically

[Ancient_Hacker]

So am I buying light? I'd say I'm buying information transport services. I don't want the light, I don't need the light, in fact I can't see the light and get the service I want. One could say the light is incidental to the data delivery. One could even claim you're not buying the light, but the dark pauses that carry the information.

One way around it-- they could switch to infrared LED's, then you're not getting visible light.

If they claim you're still getting heat, challenge them to feel the end of the fiber and detect any heat coming out.

It does make Ben Franklin, or was it Faraday, apropos to today. Back then he was showing some govt official batteries and electromagnets. The official asked "What good is it?" Reply: "Soemday, you'll tax it".

Re:This may be an Indian "April Fools"

[radtea]

Unfortunately, to paraphrase Faraday, nothing is too stupid to be true.

In some jurisdictions compressed air is considered a "tangible commodity" and therefore subject to sales tax (not VAT or GST, but ordinary sales tax that nominally applies only to manufactured goods.) The dive shop in my home town had a letter from the provincial government posted explaining this, as a lot of customers were asking, "Why the hell to I have to pay provicial sales tax when I get my tanks filled--isn't this a service? And aren't services not subject to provincial sales tax?"

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. Much like every other human organization, in fact.

And it's not really light either, instead...

[Anonymous Coward]

...it would be more accurate to refer to it as "heat" since all fiber optic network devices pretty much operate at invisible infrared wavelengths.

Question for the Indians out there

[jonatha]

Is electrical service subject to VAT in India?

Re:100 phothons please

[dgatwood]

The amount of light generated by the customer should be equal to the amount being generated by the other end, unless you send a significantly disproportionalte number of 1 bits versus 0 bits. See Manchester Encoding.

The money changes hands in exchange for actually routing the data back and forth, not for providing the light. Where the light is concerned, you have a like-for-like (light-for-light?) exchange between two parties with no financial transaction involved. So basically, the companies should simply tell the government that the two parties performed a like-for-like exchange of equivalent amounts of light, and that no additional money changed hands as a result of any inequality in the number of zero (high) bits. Therefore, since 15% of zero is zero, no tax is owed. Problem solved.

Re:100 phothons please

[Jherek Carnelian]

So basically, the companies should simply tell the government that the two parties performed a like-for-like exchange of equivalent amounts of light, and that no additional money changed hands as a result of any inequality in the number of zero (high) bits. Therefore, since 15% of zero is zero, no tax is owed. Problem solved.

You obviously do not know how to think like a bureaucrat. You can't avoid paying taxes on transactions just because you don't use money as payment. If a like-for-like exchange was made, then clearly taxation needs to be levied in both directions, bringing the total taxation revenue level to 30%.

Electromagnetic Waves

[Anonymous Coward]

Light is just a tiny part of the spectrum that is being used to carry data. What about digital radio, for example? Do they tax broadcasters of that, too?

Re:100 phothons please

[Beyond_GoodandEvil]

Light is _very much_ worth something.

The power to tax is the power to destroy. So if the Indian govt. wants to destroy their "information" economy by taxing ISPs for light generating, then they are on the right track.

This illustrates my point. . .

[Fantastic Lad]

So when Hezbollah kidnapped Americans and created the "Iran Hostage Crisis" in the 70s, they weren't "terrorists" back then? I knew what terrrorists were in the 70s and their definition has not changed one bit.

What? Hezbollah emerged in Lebanon in the 80's. They had nothing to do with the "Iran Hostage Crisis".

And the Iran Hostage Crisis was hardly the result of a terrorist act. --It came about more through a mob reaction to American villainy. (The CIA regularly interferes with other nations' natural evolution and self-determination, usually with extremely negative results.)

The Iran Hostage Crisis, From Wikipedia. . .

In 1953, emerging democracy led to the election of reformist Prime Minister Mohammed Mossadegh; under Operation Ajax, the CIA helped the Shah and conservative elements in Iran remove Mossadegh in what was widely seen as a coup d'état. Those opposed to the Shah, because he did not grant them freedoms and reforms he promised in the early 1960s, greatly resented this action by the Americans. Moreover, the Shah and his elite supporters were seen as enriching themselves and living an opulent Western lifestyle; this particularly bothered religious conservatives. The social and religious opposition combined to topple the Shah's regime in the Iranian revolution, and the Shah fled the country in January 1979.

The U.S. attempted to mitigate the damage by finding a new relationship with the de facto Iranian government, but in October of 1979, the Shah, ailing from lymphoma, was admitted to the U.S. for medical treatment. This caused widespread Iranian suspicion it was part of a plan to re-enact the 1953 coup, and enraged the revolutionary movement.

On November 1, 1979 Iran's new leader Ayatollah Ruhollah Khomeini urged his people to demonstrate against United States and Israeli interests. Khomeini was anti-American in his rhetoric, denouncing the American government as the "Great Satan" and "Enemies of Islam".

Thousands of people gathered around the U.S. embassy in Tehran, protesting. The embassy grounds had been briefly occupied before, during the revolution, and protest crowds outside the fence were common. Iranian police were less and less helpful. On November 3 Radio Turkey aired an analysis predicting a Coup within weeks, conducted by CIA agents in a similar fashion as Operation Ajax to re-install the Shah. On November 4, amid another chaotic occupation of the grounds, a mob of around 500 Iranian students (although reported numbers vary from 300 to 2000) calling themselves the Muslim Students Following the Line of the Imam seized the main embassy building.

Terrorists? Sounds more like an angry and frightened mob to me. The word 'Terrorist' was spun later by the media to create a useful emotional label which is easily applied whenever a Western government wants to create a quick fear reaction and sequester the public from reality.

-FL