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BPO firms worry about commuting, service tax

BPO firms worry about commuting, service tax
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First Published: Tue, Feb 27 2007. 03 48 PM IST
Updated: Tue, Feb 27 2007. 03 48 PM IST
Mumbai: Business process outsourcing (BPO) firms that employ workers on night shifts are concerned that shifting into special economic zones to get tax breaks will force workers to commute outside their towns. BPO firms are hoping for an extension of a “sunset” clause that provides tax breaks for firms registered with the Software Technology Parks of India (STPI).
“We are employing private-sector transport on a large scale and the government should look at providing some subsidy to the vehicle owners,” says P.G. Raghuraman, a senior executive at Accenture’s BPO operations.
The industry wants a more level-playing field when it comes to service tax paid on exports. Currently, companies outside STPI registration are treated like domestic-service companies and end up paying service tax and other charges.
“The service tax paid by BPOs is 28–60%,” says an analyst at a Mumbai brokerage house. There are concerns within the industry when it comes to the taxation issue as interpretations and ambiguities exist.
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First Published: Tue, Feb 27 2007. 03 48 PM IST