Tax Decision Goes Against Subex

By Eric Priezkalns

19 Jun 2013

Monetization & Assurance

Subex, the Indian business assurance vendor, received bad news when the Karnataka High Court upheld a decision to remove tax exemptions previously given to businesses operating in the country's Special Economic Zones (SEZs). The court dismissed Subex's petition in the process of making its judgement. For more, see here. The effect of the tax change is reported to be the......imposition of 18.5 per cent minimum alternate tax (MAT) on the book profits of SEZ units with effect from April 1, 2011, besides imposing dividend distribution tax with effect from June 1, 2011.Indian business taxes are fiendishly complicated, and the interpretation and application of Indian tax law is notoriously unpredictable, as has been highlighted by a string major tax cases, including cases that involved telecoms giants Vodafone and Nokia. An earlier survey showed the imposition of MAT on SEZs has made India less attractive as an investment destination. This ruling adds to Subex's tax woes, who are separately disputing demands for USD6.6mn in back taxes and related penalties.

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Subex, the Indian business assurance vendor, received bad news when the Karnataka High Court upheld a decision to remove tax exemptions previously given to businesses operating in the country’s Special Economic Zones (SEZs). The court dismissed Subex’s petition in the process of making its judgement. For more, see here. The effect of the tax change is reported to be the…

…imposition of 18.5 per cent minimum alternate tax (MAT) on the book profits of SEZ units with effect from April 1, 2011, besides imposing dividend distribution tax with effect from June 1, 2011.

Indian business taxes are fiendishly complicated, and the interpretation and application of Indian tax law is notoriously unpredictable, as has been highlighted by a string major tax cases, including cases that involved telecoms giants Vodafone and Nokia. An earlier survey showed the imposition of MAT on SEZs has made India less attractive as an investment destination. This ruling adds to Subex’s tax woes, who are separately disputing demands for USD6.6mn in back taxes and related penalties.

Eric Priezkalns http://revenueprotect.com

During his career, Eric has been a Director of Risk Management for a national telco, the Chief Executive of the Risk & Assurance Group, a Chief Marketing Officer for a software business, a consultant, a public speaker and the publisher of Commsrisk since its launch in 2006. Look here for more about the history of Commsrisk and the role played by Eric.

The comms providers that Eric has worked for include Qatar Telecom, Cable & Wireless, T‑Mobile, Sky and Worldcom. In addition to his proficiency at speaking about the current scamdemic, Eric is also a qualified chartered accountant and a subject matter expert in consumer protection, enterprise risk management, fraud prevention, data integrity and billing accuracy. Eric was the lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He can be reached through the contact form on this website.

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