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Budget2016 Telecom - read breaking and trending Budget2016 news, stories, headlines. Business insider India is providing latest, handpicked stories related to the Telecom category.

Budget2016 Telecom - read latest and trending Budget2016 news and headlines

The Union Budget focused on investment in infrastructure and social sectors while attempting to widen the tax base. Efforts to enhance the ease of doing business have received a fillip with focus on simplifying tax compliance. Wipro applauded the government’s efforts to increase digital inclusion.
 

	“I would like to commend the Finance Minister for balancing the investment needs of a growth economy with commitments on fiscal discipline,” said Jatin Dalal, the chief financial officer of Wipro Limited. “The measures announced for the rural economy should boost productivity and incomes leading to growth in consumption. The government has responded positively to representation from the Industry to extend the sunset date on units in Special Economic Zone on account of the gestation time taken to operationalize production units in SEZ.”
 

	He also applauded the efforts to increase the use of technology in e-governance.
 

	“I welcome the special patent regime which will encourage research and lead to generation of intellectual property in India,” he said.

	 
	 
	(Image credits: wipro)

Wipro applauds government’s efforts to simplify tax compliance

The overall Union Budget 2016-17 is encouraging for the common man. Altaf Halde, the managing director of Kaspersky Lab (South Asia) said it is a balanced and realistic budget in difficult times. 
 
The government announced numerous welcome moves, like the tax relief in House Rent Allowance. But Halde was most excited about the new digital literacy scheme. 
 
“The announcement of digital literacy scheme to be launched to cover 6 crore additional rural households is a welcome move. This will not only boost the fast adoption of digital technologies across the country but also encourage digital means to reach out to consumers and different markets,” said Altaf. 
 
He added <a href="http://www.businessinsider.in/The-new-budget-gives-startups-a-100tax-exemption-for-three-years-but-theres-a-catch/articleshow/51194299.cms">start-ups getting a 100% tax exemption for 3 years except for Minimum Alternative T</a>ax is again a good call taken by the government, as this will entice budding entrepreneurs to start their own business and since Kaspersky is targeting this sector for its software business, it could prove beneficial for the company as well. 
 
Kaspersky Lab is the world’s largest privately held vendor of endpoint protection solutions. It has remained an innovator in IT security and provides effective digital security solutions for large enterprises, SMBs and consumers. 
 
(Image credits: Indiatimes)

The head of Kaspersky in India praises new budget for boosting digital technology

The 2016-17 Union Budget highlighted the importance of technology in every aspects of life, from agriculture to skill development to big schemes of the government.
 

	“Technology has been recognized as an important enabler across initiatives ranging from agriculture to skill development to PDS to public procurement. Also, the announcements on the Rural Digital Literacy and the Digital Saksharta Abhiyan are positive strides to bolster the ‘Digital India’ vision,” said Rahul Agarwal, the managing director of Lenovo India.
 

	‘Make in India’ and ‘Digital India’ remained important items on the agenda in the Budget this year. 
 

	“The changes in the customs and excise duty rates on components &amp; sub-components reaffirm the ‘Make in India’ vision of the government. This will help in building a robust component ecosystem in the country, which is very important for becoming a manufacturing hub,” said Rahul.
 

	Though the overall sentiment was positive, Agarwal was hoping the government would boost PC manufacturing in the country, a step direly needed to revive the PC market.
 

	“While the government’s focus has remained on giving an impetus to domestic manufacturing, we were hoping to see the duty differential policy being extended to PC manufacturing but could not happen. We will have to engage further with the government in this area,” he said.

	 
	 
	(Image credits: lenovo)

Lenovo: Budget doesn’t go far enough to encourage PC manufacturing in India

The <a href="http://www.businessinsider.in/searchresult.cms?query=Finance+Ministry">Finance Ministry</a> has long acknowledged the significance of the <a href="http://www.businessinsider.in/searchresult.cms?query=telecom+sector">telecom sector</a> in the growth of the economy. However, many of the sector’s growth centric demands were clearly looked over in the Modi Government’s first full-fledged budget – the Budget 2015. 
 
As a recap, here’s what the Budget 2015 had for the sector - 
 
Direct Tax Highlights: 
· Tax on royalty and technical services payments made to non-resident parties down from 25% to 10% 
· General Anti Avoidance Rules ('GAAR') Extended to 2 years 
· Rationalization of indirect transfer tax provisions under section 9(1)(i) of the Income-tax Act 
· Corporate tax rates phased reduction over the next 4 years 
 
Indirect Tax Highlights: 
· Excise duty hike on mobile handsets up from 6% to 12.5%. Imports became 6.5% costlier. That helped Make in India. 
· Service tax hiked to 16%. Services got costlier for subscribers. 
· Exemption from Special Additional Duty ('SAD') 
 
While the <a href="http://www.businessinsider.in/searchresult.cms?query=direct+tax">direct tax</a> proposals helped, Budget 2015 failed to excite many Industry players. That’s because GST got delayed further, every remittance made to overseas parties still has to be reported and administrative hassles remain. 
 
Some of the key demands of the industry fell by the roadside amidst expectations soaring high. There were no specific incentives, and no rationalization of royalty provisions. Big telcos have been facing protracted litigation about the applicability of withholding tax provisions to margins allowed to independent distributors. 
 
Amidst all the dark clouds the announcement to implement GST from April 1st, 2016 is a welcome step. Let’s hope Budget 2016 offers some positive amendments for taxpayers and companies. 
 
 Image credits: Indiatimes

Did Budget 2015 help India’s incentive-starved
Telecom Sector?

Local telecom gear-makers want the <a href="http://www.businessinsider.in/searchresult.cms?query=Narendra+Modi">Modi</a> government to offer ‘infrastructure’ status to them. They also want <a href="http://www.businessinsider.in/searchresult.cms?query=Finance+Minister+Arun+Jaitley">Finance Minister Arun Jaitley</a> to extend tax sops under Section 35AD for domestic manufacturers. 
 
The Telecom Equipment Manufacturers Association of India (TEMA) that represents local <a href="http://www.businessinsider.in/searchresult.cms?query=telecom">telecom</a> product makers wants the government to levy a 5% cess on telcos to build a corpus for funding local telecom R&amp;D and IPR creation. 
 
Key TEMA members include Bharti Teletech, C-DoT, Bharat Electronics, Sterlite Technologies, HFCL, Lava Mobiles, ITI, Birla Ericsson Optical and United Telecom among others. 
 
"Infrastructure status to domestic <a href="http://www.businessinsider.in/searchresult.cms?query=telecom+equipment+manufacturing">telecom equipment manufacturing</a> companies complying with PMA provisions will help the industry to benefit from the incentives," the TEMA chairman Emeritus N K Goyal has said. 
 
TEMA has also asked for an extension of tax sops under Section 35AD to local telecom gear makers complying with PMA norms. This is expected to boost local manufacturing of electronics and telecom gear. It has also sought imposition of 25% duty on telecom/ICT products under the `Others' category that are now being imported at zero duty. 
 
Image credit: Indiatimes

Budget 2016 – Here’s what Telecom
Gear-makers Want

The <a href="http://www.businessinsider.in/searchresult.cms?query=Department+of+Telecom">Department of Telecom</a> (DoT) can pat themselves on the back. India’s <a href="http://www.businessinsider.in/searchresult.cms?query=telecom+manufacturing">telecom manufacturing</a> is getting better. Domestic companies are churning out quality solutions at affordable rates. It’s just a matter of time that these go on to become a global brand. However, that can only be possible with a li’l push from the government. 
 
As of now, Indian manufacturers form a minor portion of the overall <a href="http://www.businessinsider.in/searchresult.cms?query=telecom+equipment">telecom equipment</a> market. That can change, and soon. Mr. Modi, if you’re reading Sir… 
 
1. The focus should not only be on manufacturing. We need quality <a href="http://www.businessinsider.in/searchresult.cms?query=R%26D+centres">R&amp;D centres</a> for local companies that can match any multinational company doing business in the country. Only then can we form an ecosystem that can produce advanced telecom products. 
 
2. India is known for its IT and <a href="http://www.businessinsider.in/searchresult.cms?query=IT-enabled+services">IT-enabled services</a> worldwide. Our companies offer services to 95% Fortune 500 companies. However, we need to get out of service mode, and get into problem solving mode. Ask <a href="http://www.businessinsider.in/searchresult.cms?query=Vishal+Sikka">Vishal Sikka</a> to steer his big boat into product orientation. <a href="http://www.businessinsider.in/searchresult.cms?query=Wipro">Wipro</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=TCS">TCS</a> will soon follow *Wink*. If we have a strong <a href="http://www.businessinsider.in/searchresult.cms?query=equipment+manufacturing">equipment manufacturing</a> base and a <a href="http://www.businessinsider.in/searchresult.cms?query=software+development">software development</a> base ready, it’s only a matter of time that Indian IT becomes a formidable player in the 5G space. 
 
3. India accounts for over 13% of the world's <a href="http://www.businessinsider.in/searchresult.cms?query=mobile+telecom">mobile telecom</a> subscribers. It also accounts for over 6% of India’s GDP. Long story short, its hell important, both for the country and the companies! They don’t want to lose out on a lucrative market, and you want investment and employment. Why not work together? 
 
4. <a href="http://www.businessinsider.in/searchresult.cms?query=Telecom+sector">Telecom sector</a> is one of the most fiercely competitive sectors in India. The sector deserves some clarity on tax implications linked to big telecom payments. No one wants to caught up in tax disputes regarding spectrum payments. 
 
Image credit: Indiatimes

This is how India can become a 5G
Super-power

The <a href="http://www.businessinsider.in/searchresult.cms?query=Telecom+Ministry">Telecom Ministry</a> has asked for a 10 year tax holiday for mega projects in the <a href="http://www.businessinsider.in/searchresult.cms?query=Make+in+India">Make in India</a> drive. These are expected to attract more investments for <a href="http://www.businessinsider.in/searchresult.cms?query=Narendra+Modi">Narendra Modi</a>’s <a href="http://www.businessinsider.in/searchresult.cms?query=Make+in+India">Make in India</a> initiative. <a href="http://www.businessinsider.in/searchresult.cms?query=Excise+duty">Excise duty</a> exemption has also been suggested on a range of electronic equipment. This is expected to help create a <a href="http://www.businessinsider.in/searchresult.cms?query=manufacturing">manufacturing</a> ecosystem in the country. 
 
The 10 year tax holiday in the 15 years block is expected to attract fresh investments of over $1 billion over the next three years. 
 
"Such proposals would be exempt from MAT (minimum alternate tax) as well for the same time frame," a senior official said. 
 
The telecom ministry has also reportedly proposed that VoIP phones and gateways, besides laptops or notebooks priced under Rs 15,000, should be brought under the differential duty blanket. These include electronic equipment like network switches, routers and modems has also been proposed. Differential <a href="http://www.businessinsider.in/searchresult.cms?query=excise+duty">excise duty</a> is currently levied on only mobile phones. 
 
Including lithium ion batteries and TV set-top boxes to the list of devices that connect to the Internet has also been proposed. 
 
It’s important to note that after the government made mobile phone imports 11% more expensive, smartphone giants like Foxconn, Sony, Lava, Micromax and Intex took to domestic manufacturing. This has led to local production value rising 95% YoY to Rs 18,000 Crores and volumes soaring to 100 million units in 2015 according to the Indian Cellular Association 
 
The quantum of this production is set to double by March 2016. This will see employment in the sector going up by over 60%. Manufacturers' Association of Information Technology (MAIT) that represents prominent IT companies including Dell and Lenovo has demanded similar duties should be applied to this sector to incentivize local production. 
 
If these proposals are accepted, local production can begin in India. That will invite fresh investment. This will create the much needed local <a href="http://www.businessinsider.in/searchresult.cms?query=manufacturing">manufacturing</a> ecosystem.

Budget
2016 – Telecom Ministry wants Holiday. Tax Holiday!

India is currently the second-largest <a href="http://www.businessinsider.in/searchresult.cms?query=telecom">telecommunications</a> market in the world. The large scale influx of Chinese <a href="http://www.businessinsider.in/searchresult.cms?query=smartphone">smartphone</a> makers offering affordable <a href="http://www.businessinsider.in/searchresult.cms?query=smartphone">smartphones</a> have ensured consistent growth in the sector. The government has also been pushing constructive reforms in the sector. 
 
The <a href="http://www.businessinsider.in/searchresult.cms?query=GST">GST</a> is away. That aside, here are the 3 key concerns the <a href="http://www.businessinsider.in/searchresult.cms?query=telecom+industry">telecom industry</a> has for the upcoming <a href="http://www.businessinsider.in/searchresult.cms?query=Budget+2016">Budget 2016</a>. 
 
1. CENVAT Credit Scheme: <a href="http://www.businessinsider.in/searchresult.cms?query=CENVAT+Credit">CENVAT Credit</a> is a credit for central excise on inputs purchased for the manufacture or duty paid in relation to the manufacture of the final product. CENVAT credit is also available for duty paid on capital goods. This includes machinery, plant, spare parts of machinery etc. 
 
Imagine <a href="http://www.businessinsider.in/searchresult.cms?query=CENVAT+Credit">CENVAT Credit</a> like a credit balance in bank account that can be adjusted towards the excise duty payable. There are disputes over availability of credits on passive infrastructure. The industry demands steps to rationalize and broad-base input credit scheme to make indigenous services competitive against imports. Restricted credits on <a href="http://www.businessinsider.in/searchresult.cms?query=Swachh+Bharat+Cess">Swachh Bharat Cess</a> are also inflating output costs. That needs to be taken care of. 
 
2. Education Cess credit: Use of input credit in Education Cess (EC) and Secondary and Higher Education Cess (SHEC) has been restricted to limited cases. The industry wants the government to allow them to use their entire EC/SHEC balance. 
 
3. Clarity: The sector would also love some clarity on tax implications linked to big telecom payments. These include clarifying dispute related to discounts, tax deductibility of spectrum payments, withholding tax implications on <a href="http://www.businessinsider.in/searchresult.cms?query=telecom+infrastructure">telecom infrastructure</a> services and so on.

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