Cellular service providers are planning to take the Indian government to court over a stricture to withdraw the duty free status currently enjoyed by the industry. The government proposes to now levy a 23 percent tax on telecoms software, which is similar to that for telecoms hardware. The operators perceive the latest notification as a marked deviation from the international trend, where governments across the globe have been advocating duty-free software imports both in the World Trade Organization (WTO) and under the International Telecom Agreement (ITA). The cash-strapped cellular industry has much at stake as the latest Finance Ministry order can set it back by several million dollars. The Finance Ministry, in turn, has attributed its decision to detected instances of fraud during the import of telecommunications equipment by some cellular operators.
