Budget Expectations - Sandeep Ladda, PwC

by CXOtoday Staff    Feb 24, 2011

Sandeep Ladda  PwCSandeep Ladda, Executive Director, telecom and entertainment & media tax practice, PwC, shares his expectations from the Union Budget 2011 with CXOtoday.com.

“Tax holiday for restructured undertakings: The government should encourage consolidation among telecom operators by deleting the restrictive provisions of section 80-IA (12A) of the Income tax Act, 1961 (Act) (which currently deny tax holiday to eligible undertakings undergoing restructuring).

Lumpsum spectrum charges: Clarity is required on allowability of deduction under section 35ABB of the Act in respect of lumpsum charges already paid to the tune of more than Rs 1 trillion for acquisition of 3G and BWA licenses. The Government should also consider introducing tax holiday for licenses granted till 31 March, 2011.

Telecoms equipment manufacturing: To encourage telecom equipment manufacturing, specific tax holiday should be introduced for those not finding it feasible to set up operations in special zones.

Withholding tax on interconnect-usage/bandwidth/satellite charges: A clarification should be provided that such payments are not covered within the definition of royalty or fees for technical services under section 9(1)(vi)/(vii) of the Act, respectively.

Refund of special additional duty of customs (SAD): SAD, a non-creditable levy imposed on the telecom service providers, should be exempted or made creditable against output service tax.”