Question : IT EXPORT TO JAPAN

:-

(a) whether IT Industry is facing any hurdles in IT exports to Japan;

(b) if so, the details thereof; and

(c) the action proposed to remove the hurdles?

Answer given by the minister

THE MINISTER OF STATE IN THE MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY(DR. SANJAY PASWAN)

(a) and (b): Yes, Sir.

1. Charging of 20% withholding tax on payment against export of Software and Services from India by interpreting the same as Technical Services. 2. Language problems.

(c): 1. The issue of charging of 20% withholding tax was taken up by the Indian competent Authority with their counterpart Japanese Competent Authority and their Tax Policy Division in a recent visit to Japan. However, the issue has not yet been resolved as it involves interpretation of Indo-Japan Double Taxation Avoidance Agreement and reaching a mutually acceptable understanding. 2. Department of Commerce, Ministry of Commerce & Industry, Government of India is supplementing the efforts of Indian IT Industry through a Scheme `Language Related Market Access Facilitation Initiative` (LRMAFI) to help exporters learn Japanese language. Under the Scheme, 75% of the tuition fee is reimbursed.