New Delhi: In a pre-budget Memorandum sent to the Finance Ministry and to the Department of Information Technology through their representative body, the Internet and Mobile Association of India [IAMAI], the industry has suggested few steps in order to ensure long-term growth of the industry.

Industry body wants preferential corporate tax treatment for the high technology internet and mobile VAS sectors. It says that today Internet and Mobile Value Added services are what IT and ITeS used to be 10 years back. They are the emerging technologies where India has an opportunity to take the lead; they are in a position to create global companies such as Amazon, Google and eBay. And has recommended content and service providers be exempt from Income Tax for 10 years under section 35 (A) of Income Tax Act with a very strict sunset clause.

It has also suggested fiscal benefits for E-Commerce companies. The Telecom Regulatory Authority of India in its recommendations on increasing the penetration of broadband had strongly recommended some fiscal measures that would help the internet users and by implications encourage the adoption of internet and broadband by more and more people. IAMAI wants The Government of India to recommend to all State Governments to waive sales tax on goods and services that are transacted through electronic mode (e-commerce) for the next 5 years up to limits to be prescribed by the Government.

IAMAI also wants 5 year Moratorium on Service Tax on internet services. This IAMAI says will allow this nascent industry to grow in size and stabilize and be in a position to accept additional tax responsibilities.

Highlighting the expectations from the Budget the association, in a press release, drew attention to the fact that three of the sectors which had in recent years driven growth and development in the country: IT&ITes, Telecom and Infrastructure were well supported by the government. An important component of that support being direct or indirect fiscal benefits. If the government seriously wishes to bring the rural areas in the developmental vortex through broadband connectivity, it must be involved in the growth and expansion of the digital industry.

In a prepared statement Dr Subho Ray, president, IAMAI said, "Everyone recognises that the digital industry is capable of delivering huge positive externalities, especially for rural areas, it is time that the industry should incentivised to do so."