Nasscom seeks tax clarity, flags cloud infra concerns

EASE OF BUSINESS

- URVI MALVANIA

INDIA'S TECHNOLOGY INDUSTRY body Nasscom has urged the government to prioritise tax certainty for the digital economy in the Union Budget, flagging concerns around cloud infrastructure, cross-border digital taxation and employee compensation that it says are beginning to weigh on investment decisions.

At the top of its wish list is clarity on the tax treatment of foreign cloud companies that use Indian data centres. Nasscom has warned that the current approach risks treating routine infrastructure usage as creating an additional tax exposure for overseas cloud service providers, even though Indian operators already pay tax on their margins.

“Foreign cloud providers rely on Indian data centres that are owned and controlled by Indian operators who already pay tax on their arm’s length margins.