India8217;s concern over Japan software tax

quot;India does not levy tax on software exports and hence insistence on deducting tax at source will breach provisions of the treaty,quot; president of National Association of Service and Software CompaniesNASSCOM, Dewang Metha, told PTI. quot;This would harm our bi-lateral trade relations,quot;Metha said, adding, quot;Japanese companies find Indian software as an extremely cost-effective and high quality and these firms themselves would be at disadvantage in the long run.quot;

India8217;s software exports to Japan are expected to touch Rs 400 crore in 98-99. It was 4 of total software shipment of the country in 97-98. The confusion has arisen following Japan classifying our software as quot;technical servicesquot; contrary to the world wide practice of classifying software exports as intellectual property or contract, Mehta said. Japan has shown keen interest in sourcing software from India and the exports are on the rise following formation of exclusive Japanese software development consortium.