A public interest litigation petition seeking a direction to the Union Finance Ministry to bring business process outsourcing (BPO) companies in the income tax net has been filed in the Madras High Court.
The First Bench of Chief Justice A.P. Shah and Justice K. Chandru ordered notices to the Centre on the petition filed by S. Sivakumar.
Circular
The petitioner prayed for a direction to the respondent-authorities to assess BPO companies and collect taxes on income from their core as well as incidental auxiliary activities.
He said the Union Finance Ministry issued a circular on January 2, 2004, but withdrew it in September 2004.
No assessment was carried out during the interregnum period either.
Stating that the public injury caused by the non-assessment of the firms was significant, the petitioner claimed that the assessment of 500 listed BPO firms alone would yield over Rs. 1.5 lakh crore as tax revenue.
