VoIP companies offering services to India may soon find themselves scrutinized for service tax evasion from the Government of India. The Indian government is acting on the complaint filed by the ISP Association of India (ISPAI). ISPAI had filed a complaint earlier with the Ministry of Finance alleging that some companies are offering internet telephony in India without appropriate licenses.
Indian telecom laws require that any company offering telephony services in India needs to have either the ISP license or the Unified Access Service License. Telecom firms also have to pay service tax and a revenue share to maintain their license. Also, the license conditions require monitoring calls, especially the international calls, in the interest of national security. ISPAI has pointed out that a lot of companies like Skype, MSN, Yahoo, Net2phone, etc. do not have any such license and hence they are offering their services illegally in India and compromising the national security and also not paying their dues to the exchequer.
If the Indian government pays heed to ISPAI's demand, the VoIP providers may have to pay service tax for calls terminating in India, which will be passed on to the consumers. This is not very good news for the Indian junta relying on VoIP for calling home (I am one of them). There is not an easy solution for this problem and we may be in for a surprise.
Do you have an answer to this problem? Post your suggestions.
This article is written by our VoIP news editor, Alok R Saboo. Alok is pursuing his PhD in Marketing at the Pennsylvania State University.
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