nanog mailing list archives
Re: Broadband ISPs taxed for "generating light energy"
From: Matthew Black <black () csulb edu>
Date: Tue, 10 Oct 2006 09:36:37 -0700
A rather humorous article from a rhetorical perspective. The reporter emphasizes the innocence of generating light while ignoring its commercial aspects. Those light pulses are very valuable to recipients. This tax seems to parallel the U.S. Federal Excise Tax on photons and electrons (i.e., telephone service). I don't see anything unusual here other than a weak argument against taxing authority. If you want to argue against the concept of taxation, be my guest. But let's not obfuscate the real issue here. Tax evasion often results in assessment of hugh penalties. Just ask Spiro Agnew or Al Capone. This is news? matthew black california state university, long beach On Tue, 10 Oct 2006 19:58:13 +0530 Suresh Ramasubramanian <ops.lists () gmail com> wrote:
.. because they provide internet over fiber optic cables, which work by sendingpulses of light down the cable to push packets .. http://www.hindu.com/2006/10/10/stories/2006101012450400.htm So they get slapped with tax + penalties of INR 241.8 million. ________________ Broadband providers accused of tax evasion Special Correspondent Commercial Tax Department serves notice on Airtel # Firms accused of evading tax on sale of `light energy' # Loss to State exchequer estimated at Rs. 1,200 croreBangalore: The Commercial Tax Department has served a notice on Airtel, ownedby Bharti Televentures Ltd., seeking payment of Rs. 24.18 crore as tax, interest and penalty for the sale of `light energy' to its customers for providing broadband through optical fibre cables (OFC). The department has been investigating alleged tax evasion by OFC broadbandproviders, both in the public and private sectors, for selling light energy to customers. "While the assessment on Airtel was completed and a notice issued toit for alleged tax evasion during the year 2005-06, no assessment has been concluded on other OFC broadband providers," A.K. Chitaguppi, DeputyCommissioner of Commercial Taxes, said. Other OFC broadband providers facing tax evasion charges are public sector BSNL and private sector VSNL, Reliance,Tata Teleservices and Sify.The Commercial Tax Department has estimated a loss of Rs. 1,200 crore to the State exchequer in this regard since OFC broadband providers have been operating in the State for several years.Mr. Chitaguppi said that OFC operates on light energy, which is artificiallycreated by the OFC providers and sold to customers for the purpose of datatransmission and information, on the OFC broadband line. Without such energy,data or information cannot be transmitted."Whoever sells light energy is liable to pay VAT as it comes under the category of goods, and hence its sale constitutes taxable turnover attracting VAT at12.5 per cent," he said.Bharti Televentures had approached the Karnataka High Court seeking to quash the demand notice, but failed to get a stay when the case was heard by Justice Shantanu Goudar on September 1. The judge rejected Bharti's plea seeking issue of an injunction against any initiatives from the Commercial Tax Department onthe recovery of the tax.Bharti Televentures had contended in the High Court that re-assessment orders passed by State tax officials and the issue of demand notice was not valid as the disputed activity fell under the provision of service tax levied by the Union Government and did not attract VAT. The High Court is expected to take upthe case for hearing again in the next few days. `Business venture'The Commercial Tax Department has argued that the OFC broadband operators are running a business venture after investing thousands of crores to put in place a state-of-the-art set-up to artificially generate light energy and supply it to its customers for their data transmission work. The characteristics of the light energy constitute a moveable property, which has to be categorised as `goods' as per the norms laid down by the Supreme Court. "In the process of data transmission, other than light energy, no other elements are involved andthe customers are paying for the same. This proves that light energyconstitutes goods, which is liable for levy of tax. Therefore, the State hasevery legal competence and jurisdiction to tax it," the department has contended.It has taken serious note of the non-payment of taxes by the broadband service providers. "Reporting a turnover and then claiming exemption is one thing. But some of the OFC operators don't even report their turnovers," Mr. Chitaguppialleged.
Current thread:
- Re: Broadband ISPs taxed for "generating light energy", (continued)
- Re: Broadband ISPs taxed for "generating light energy" Roy (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Suresh Ramasubramanian (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Michael Froomkin - U.Miami School of Law (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Michael . Dillon (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Roy (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Joe Loiacono (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Joseph S D Yao (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Steven M. Bellovin (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Joseph S D Yao (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Jaap Akkerhuis (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Suresh Ramasubramanian (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Joseph S D Yao (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Matthew Black (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Fergie (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Simon Lockhart (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Suresh Ramasubramanian (Oct 10)
- RE: Broadband ISPs taxed for "generating light energy" Scott Morris (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Brandon Butterworth (Oct 10)
- Re: Broadband ISPs taxed for "generating light energy" Gregory Hicks (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Joseph S D Yao (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Jeff Shultz (Oct 11)
- Re: Broadband ISPs taxed for "generating light energy" Joseph S D Yao (Oct 11)