The software channel is hoping that the newly formed Shome committee appointed by the Union Finance ministry to study and make recommendations on tax related issues and disputes could help resolve some of the challenges they are currently facing.
Last week Finance ministry appointed renowned economist Parthasarathi Shome as adviser to the finance minister who will meet with different industry groups to find solutions to tax related disputes. Shome will be assisted by officers of the Tax Policy and Legislation (TPL) wing of the Central Board of Direct Taxes (CBDT) and the Tax Research Unit (TRU) of the Central Board of Excise and Customs (CBEC). The new forum is expected to meet every Wednesday and discuss with different industry groups, and would make recommendations which would be used for formulating future policies and laws.
“We are optimistic that the honourable committee which has expressed interest in listening to us might provide some solutions to long pending issues faced by the software industry,” said Biren Shah, Chairman, ISODA.
“The biggest need of the hour is to ensure that interpretations around software including what different forms in which software are available and sold is uniform across all government departments,” said Harinder Salwan, CEO, Tricom Multimedia, Mumbai. “Once clarity is provided then we will have lesser hassles in dealing with the tax departments.”
Many partners are continuing the demand for removal of the levying of both service and sales tax on software. However Shah is not that optimistic. “We have knocked the doors of the highest courts in the country on double taxation, and so far there has been no relief. Our demands would be more on creating a business atmosphere that’s healthy. A quick transition to GST would be a welcome move from the government.”
Other challenges include a lack of clarity regarding withholding taxes which an importer is supposed to pay in case the software vendor does not have operations in the country. “Present laws are only friendly for those partners who buy from large distributors who represent large software vendors with presence in India. Many ISODA members deal with a lesser known niche software product makers overseas,” he added.
Last week Finance ministry appointed renowned economist Parthasarathi Shome as adviser to the finance minister who will meet with different industry groups to find solutions to tax related disputes. Shome will be assisted by officers of the Tax Policy and Legislation (TPL) wing of the Central Board of Direct Taxes (CBDT) and the Tax Research Unit (TRU) of the Central Board of Excise and Customs (CBEC). The new forum is expected to meet every Wednesday and discuss with different industry groups, and would make recommendations which would be used for formulating future policies and laws.
“We are optimistic that the honourable committee which has expressed interest in listening to us might provide some solutions to long pending issues faced by the software industry,” said Biren Shah, Chairman, ISODA.
“The biggest need of the hour is to ensure that interpretations around software including what different forms in which software are available and sold is uniform across all government departments,” said Harinder Salwan, CEO, Tricom Multimedia, Mumbai. “Once clarity is provided then we will have lesser hassles in dealing with the tax departments.”
Many partners are continuing the demand for removal of the levying of both service and sales tax on software. However Shah is not that optimistic. “We have knocked the doors of the highest courts in the country on double taxation, and so far there has been no relief. Our demands would be more on creating a business atmosphere that’s healthy. A quick transition to GST would be a welcome move from the government.”
Other challenges include a lack of clarity regarding withholding taxes which an importer is supposed to pay in case the software vendor does not have operations in the country. “Present laws are only friendly for those partners who buy from large distributors who represent large software vendors with presence in India. Many ISODA members deal with a lesser known niche software product makers overseas,” he added.
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