Free e-commerce from tax net 8212; CVC

HYDERABAD, AUG 13: The Central Vigilance Commissioner CVC N Vittal has asked the Union government to free e-commerce from the tax net a...

HYDERABAD, AUG 13: The Central Vigilance Commissioner CVC N Vittal has asked the Union government to free e-commerce from the tax net and give a legal stamp to internet telephony.

The present government may not be able to do so in view of the ensuing elections, but the CVC wants the new government that comes to power to issue an ordinance to give a 10-year tax holiday to e-commerce so that India can take a firm root in the growing domain of internet trading.

Launching an Indian portal site called Gnan.Com8217; here last night, Vittal favoured scrapping of duty and sales tax on items sold on the net. 8220;By this we will open up a whole new world in commerce,8221; he said while asking the government to give up its art of keeping the people poor8217; through restrictive policies.

In the context of restrictive policies, he cited the example of internet telephony which was fast catching up in the west. 8220;This is a cheap mode of communication that will benefit millions of people. So why clamp restrictions?8221; the CVC asked. However, Vittal lauded the government8217;s telecom policy stating that it was a step in the right direction.

Vittal8217;s plea follows the statement by Shankar N Acharya, chief economic adviser to ministry of finance, in Chennai that taxing of e-commerce is one of many things that is under the serious consideration of the government.

While speaking at a seminar on tax reforms and private sector growth: international experience8217; organised jointly by the Confederation of Indian Industry CII and Indian Council for Research on International Economic Relations ICRIER, Acharya said that the issue of taxing the trade through electronic means has to be handled immediately as the sheer quantum of trade is expected to be significant. He also said that the state governments should take the lead in introducing value-added tax VAT system rather than waiting for the Central government to alter the Constitution which in the current situation does not look politically feasible.

V P Gulati, director of the Institute of Development and Research in Banking Technology, said to meet the growing demand of e-commerce, banks in India would need upgraded computer systems and connectivity. He asked the government to provide better and faster bandwidths so that the process of bank computerisation can be speeded up.

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Senior advisor, energy, V Raghuram said, 8220;e-commerce is moving from B2C business to consumer to B2B business to business. The B2B phase is still in its nascent stage in the United States and in India it is yet to take roots. A research study indicates that B2B e-commerce will touch a whopping 78 per cent cyber transactions by 2001.8221;

Madhu Avlur, the brain behind Gnan.Com, outlined the salient features of the portal site and said the digital gateway would give an Indianness to cyber information and data.