BPO tax on MNCs abolished

Debate over the effects of taxing multi-national business process outsourcing firms finally came to an end with Finance Minister Jaswant Singh announcing that the government has no plans to impose tax on MNC BPO companies.

Singh made the announcement while presenting the Interim Budget for fiscal 2004-05 in Parliament on Tuesday.

Outsourcing and India: Complete Coverage

Earlier, Central Board of Direct Tax had decided to cash in on the boom in business process outsourcing and call centre industry by taxing foreign companies outsourcing services to India.

Media reports suggested that foreign banks and call centres that had planned to outsource jobs to India were now reviewing their decision and looking for alternative destinations like China and the Philippines.

Even those who had established base in India were mulling whether to relocate to other Asian nations.