Based on the exemption of duties/taxes given in India, the government has announced a tax incentive package for the 'call centers' to encourage their establishment. Under the package announced in the budget, minimum 5 percent customs duty would be applicable on the equipment (not manufactured locally).
Exemption of sales tax would be applicable on such items and withholding tax at the reduced rate of one percent would apply at import stage on equipment relating to call centers.
The CBR has proposed reduction in customs duty from 25 to 5 percent on the import of 'dedicated telephone exchange system for call centers'. Five percent duty has also been proposed on the import of video conferencing equipment, UPS, fax machines, photo copiers, IP phones, telephone sets/head sets/ and sets, dialers, generator sets/auto invertors/auto converters, Cat 5/Cat 6/Power cables, PAPX switch, multimedia projectors, CCTV, plasma TVs and PUD's.
According to the CBR, the geographical distances have decreased in this century of information technology. International trade in this sector has run into trillions of dollars with immense opportunities across the globe. The early entrants in this area were the major beneficiaries. They have attained an optimum level where the law of diminishing returns has set-in, which has triggered the outsourcing. Our neighbouring country particularly, in "call center" sector, is reaping the fruits of this outsourcing. The CBR has recommended that there is a need to attract investment in this sector, by reducing the cost. Providing a concessionary rate of duty to importers of call center, equipment can be an effective measure in this regard. This has to be addressed as an investment project. The existing rate of duty ranges between 10 to 25 percent on items/equipment.
Comments
Comments are closed.