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Budget 2012 Expectations From Digital Businesses: COAI, IAMAI, Fashos, Milagrow, Ferns and Petals, GoDB Tech, Airtel, DoT

The general budget for the year 2012-13 will be presented in couple of hours and we will be reporting the telecom and digital media components live. In the meantime, here are some pre-budget expectations from companies in the digital media and telecom sectors.

COAI: In its pre-budget memorandum, Cellular Operators Association of India (COAI) has asked for CENVAT credit of central excise duty to be be made available to towers and shelters; to exempt the service tax on the earnings of distributors from distribution of telecom service; to classify OFC (Optic Fibre Cables) under tariff chapter heading 85, attracting Nil rate of basic customs duty, since it is a vital telecom infrastructure component and a key component for the NTP 2012 objectives;

It has also asked the government to introduce a new section to deal with tax deduction at source by the telecom operators from the discounts offered to distributors; seeked appropriate clarification on the service tax applicability in Jammu & Kashmir, so as to avoid dual levy of tax on service in lieu of general Sales Tax being paid on specified services in J&K and requested the government to delete Rule 114B(g) of the Income Tax Rules which mandates the requirement of quoting the PAN number at the time of registering a mobile connection, since it acts as an inhibitor to expand services to low end or rural subscribers.

Bharti Airtel: Bharti Airtel has seeked for the grant of ‘infrastructure sector’ status for telecom business, which would make it easier for the telecom operators to get funds easily. Read more at Business Standard

DoT: Department of Telecommunication has asked the government for infrastructure status for telecom operators and tax cuts to aid new telecom players break-even. It also suggested for tax exemptions on manufacturing of telecom equipment, rationalisation of VAT from the existing 12.5% to 4% for mobile phones and their components. Read more Economic Times.

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IAMAI:  Internet And Mobile Association of India (IAMAI) has requested the government to give tax exemption to Internet and mobile value added services companies along the lines of software and services companies for the next five years, under section 10 (a) of the Income Tax Act since, without adequate provisioning of content and services, the government’s investments in broadband infrastructure would likely to have a limited impact.

GoDB Tech: GoDB Tech has requested the Government to take proactive steps to drive down the cost of the 3G handsets and provide sops to Telecom operators to provide 3G connectivity in Rural areas since it would increase the penetration of a good mobile data connection and mobile productivity applications like education, healthcare, and m-governance.

FashosFashos has asked for Government policies that encourage broadband connectivity in India and drive down the prices of PCs and other Internet access devices to increase the adoption of ecommerce industry in India. It said that the prices of broadband connections is one of the highest in the world and availability of these connections have been one of the biggest constraints to the growth of broadband in India. The company also asked for increased Broadband access in Tier 1/2/3 towns to enable the growth of e-commerce and thereby benefit the end user. It claimed that the increased connectivity will significantly increase the contribution made by Tier 2/3 towns to total e-commerce sales from the existing levels of 20-30% to 40-50% and higher.

Milagrow: Milagrow Business & Knowledge Solutions has requested  the government to implement GST even if it is not optimal, since it will provide many tangible monetary benefits and also save the small and large businesses from avoidable procedural hassles. The company claimed that it may also indirectly control inflation as the savings will be passed on to the customers and will aid in the creation of a single market distribution system since it will abolish various forms and quotas at the state entry points along with a lot of administrative work. Warehousing could change from various small local go-downs to large central or regional distribution centres and companies will be able to sell to other states or purchase from other states without investing in a warehouse or losing tax credits for their inputs.

Ferns and Petals: Ferns and Petals has requested the government to recognise and notice the Flower Industry as an essential part of the country’s economy and setup a cold chain for the movement of perishable goods like flowers, vegetables and  fruits to ensure the transportation at a faster rate and lower costs. It has also requested to excuse or grant moratorium on all taxes to this industry in next 5 years.

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