Mar 04, 2006
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The Service Tax roulette

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Dear friends,

The powers that be have spun the wheel once again, and this time and the
ball is in our pocket!

Quote from Finance Minister's speech:
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The Following changes are proposed in the Finance Bill 2006 [refer clause 68
of the Finance Bill 2006]

(III) Following Service Tax exemptions are being withdrawn:

3) " Notification No 8/2003- Service tax dated 20.06.2003 is being rescinded
to withdraw the exemption for taxable services provided by a Call Center or
a Medical Transcription Center.
[refer to notification No 2/2006- Service Tax dated 1.3.2006]
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Wherein Notification No. 8 /2003 - Service Tax, states, I quote:

In exercise of the powers conferred by section 93 of the Finance Act, 1994
(32 of 1994), the Central Government, being satisfied that it is necessary
in the public interest so to do, hereby exempts the taxable services
provided, by a call centre or a medical transcription centre, to a client
from the whole of the service tax leviable thereon under sub-section (2) of
section 66 of the said Act.
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However, nothing said above supercedes ST Circular No. 56/5/2003 dated 25th
April, 2003 (F.No.254/1/2003-CX-4), I quote:

3.    The Board has examined the issue.  In this connection I am directed to
clarify that the Service Tax is destination-based consumption tax and it is
not applicable on export of services.  Export of services would continue to
remain tax-free even after withdrawal of notification no. 6/99 dated 9.4.99.
Further it is clarified that service consumed/provided in India in the
manufacture of goods which are ultimately exported, no credit of service tax
paid can be availed or reimbursed at present as inter-sectoral tax credit
between services and goods are not allowed.

4.    Another question raised is about the taxability of secondary services
which are used  by the primary service provider for the export of services,
Since the secondary services ultimately gets consumed/merged with the
services that are being exported no service tax  would be leviable on such
secondary services.  However in case where the secondary service gets
consumed in part or toto for providing service in India, the service tax
would be leviable on the secondary service provider.  For this purpose both
primary and secondary service providers would maintain the records deemed
fit by them to identify the secondary services with services that are being
exported.
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In short, export earnings are still exempted as per above, but until when?

We are playing reverse roulette here, friends, and Russian roulette looks to
be the next step... with all chambers loaded!

"It takes years to become an overnight success! Inch by inch, it's
a cinch."

Cheers!

Maj (Dr) Amit Chatterjee, SM
Strategist / Founder ~ mailto:amit@...
MT India ~ www.mtindia.org
"The Community of MT Professionals"

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NEWS AND VIEWS :
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1) Focus launches its second branch office at RT Nagar, Bangalore

This is the fifth production center in India. This new 100-seater facility
will help Focus increase its production staff for the huge upcoming business
that is expected to start during various months in this calendar year.  This
facility will also help save lot of traveling time for all MT professionals
who reside in this part of the city but are forced to travel to the other
part of the city to work in a company setup.  Focus already employs more
than 875 people at its existing production facilities apart from outsourcing
work to 350 MT professionals to execute work from home.  Focus also
outsources work to about 30 MT companies across the nation.  Contact:
rtnagar@...

http://www.mtindia.org/thenews/default.cfm

2) MedQuist Virtual Workforce on the job through Mitel Technology

Mitel(R), the trusted provider of IP communications, has answered MedQuist's
objective to reduce costs by making it possible for more than 1,000
employees to work from home. New Jersey-based MedQuist has selected the
Mitel Teleworker Solution, Mitel Your Assistant, the Mitel 3300 IP
Communications Platform (ICP), Mitel IP Phones, and other Mitel products
that make working from home as easy and effective as being in the office.

"Last June, the MedQuist operations team estimated that we would realize
substantial cost-savings by allowing employees to work from home as long as
we
gave them the tools to be effective," MedQuist's PBX Manager Lauren said.
"We estimate that we will be in a position to dramatically reduce our costs,
resulting in substantial savings in many key areas. The Teleworker Solution
and Your Assistant applications, will enable us to interact with our
employees, monitor their
progress and maintain cohesive communications. Integration with Your
Assistant gives us and our employees a virtual and visual presence and
availability at
all times."

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/03-06-2006/0004313722&EDATE=

3) Addax arranges US $20M capitalization for GCC business outsourcing
services company

Addax Investment Bank, the Middle East financial institution based in
Bahrain has successfully arranged a US $20 million transaction whereby
Oman-based Omanline was merged with Dubai-based MENA Business Services.
Through the transaction, an additional US $8million in capital was injected
into the company by leading investors from Saudi Arabia and Kuwait. The new
entity will be called MENA Business Services.

Omanline is a leading player in the field of medical transcription, call
centres, and specialized training services. Established in Oman, Omanline
initially worked with a major US corporation which created 150 employment
placements

In the past, India and the Philippines have been major players in the
industry. However, MENA Business Services is striving to establish the GCC
as a hub for outsourcing, building on the region's first-class
infrastructure and stability. MENA Business Services will launch an initial
200 seat facility in Bahrain in May 2006. The company's headquarters will be
established in Dubai's Outsourcing Zone in June 2006.

http://www.ameinfo.com/79367.html

4) At-Risk Patients Identified through Transcription Data Mining

Using data mining technology, ZyDoc Medical Transcription service
automatically notified physicians as to which of their patients were using
medications with FDA advisories. ZyDoc's easy-to-use transcription service
with data mining capability allows any medical practice to participate in
the electronic record revolution to extract vital information from their
medical records without limitations of current EMR systems.

Steve Koski, CEO of ZyDoc explains the significance of this event. "The
medical informatics industry has assumed that relational databases would be
required to obtain this type of information. They have been critical of free
text solutions using transcription due to limitations of data extraction.
Clearly, our data mining capability dispels those assumptions, and enables a
non-EMR practice to extract vital information from their medical records. In
this way, ZyDoc's easy-to-use transcription service allows any medical
practice to participate in the electronic record revolution. It gives
physicians the best of both worlds: ease of use and important clinical
 data."

http://www.prweb.com/releases/2006/2/prweb351837.htm

5) RepliWeb Announces Focus Infomatics Selects Its R-1 Distribution Manager

RepliWeb, Inc., announced that Focus Infomatics of Waltham, Mass., has
selected RepliWeb's R-1 Distribution Manager to mirror audio files to
Dictation Service Centers in the US and India.

Operating Transcription Service Centers in the U.S. and India, Focus
Infomatics sought to automate, streamline and guarantee the delivery of
dictation audio files (some 5000 files a day) from locations in North
America to its Transcription Service Centers in the US and India.

"Right from the start, we noticed a significant difference in quality and
reliability of the links connecting our production environments in North
American and India. The line quality and necessary bandwidth were simply not
there," said Dayashankara, N.S. Director of Operations. After extensive
market analysis and testing, the Company selected RepliWeb's R-1 Solution
for Content Mirroring and Application Deployment. Since installation a year
ago, R-1 has enabled Focus Infomatics to flawlessly mirror and deploy on a
daily basis up to a 2 GB of audio content, consisting of over 5000
individual files, in an international 24x7, real-time operational
environment.

http://www.prweb.com/releases/2006/2/prweb348824.htm

6) New Internet Collection Agency Quote Service Helps Businesses Find
Top-Notch Collection Agencies

Collection-Agency-Quotes.com, an online quote service for licensed, insured,
and bonded collection agencies, is offering businesses and practices free no
obligation quotes to locate professional collection agencies for the new
year.

"Most businesses close their books at the end of the year and realize they
have some uncollected debts," said Steve Austin, a consultant at
Collection-Agency- Quotes.com. "For them to legally deduct these debts from
their taxes, the business must attempt to collect the debts within IRS
guidelines. Many businesses can also collect the money even if it is written
off. There is often thousands of dollars of found money waiting to be
collected in the beginning of the new fiscal year."

http://www.prleap.com/pr/22708

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Thank you for your interest in MT India!

The MTIndia Team
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