The $280 billion-plus Indian technology sector is now facing a definite shift towards artificial intelligence (AI), and the industry expects a special focus on this technology in the forthcoming Union Budget.Today, AI is not just about coming out with algorithms; it involves data centres, data collection and a governance structure on the applicability of this technology. This is an area where there is a genuine requirement for foreign capital, especially in the area of data centres, but this has created certain unfavourable implications of taxation.Nasscom, the Indian IT industry’s premier body, noted in its pre-budget memorandum that 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. Industry experience has shown emerging instances where standard hosting or colocation is viewed as creating a taxable presence of the foreign provider in India.“Clear illustrations that distinguish ordinary hosting from situations where a non-resident has infrastructure at its disposal would align practice with Supreme Court principles and give confidence for future investment in data and artificial intelligence infrastructure,” Nasscom said.Also ReadIndian VCs call for policies to encourage deeper pools of domestic capital ahead of Union BudgetAt the same… Read MoreYourStory RSS Feed
