Budget offers tax holiday till 2047 for global data service providers

NEW DELHI: The Union Budget gave a big boost for setting up data centres in India with Finance Minister Nirmala Sitharaman doling out a tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using cloud infrastructure in the country. However, for availing the tax benefits the data centre providers also need to give services to customers in India.The move is a clear direction that the govt wants to have greater investment inflows in the futuristic business of data centre in India. The country has already seen investments by global giants such as Google, Microsoft and Amazon in data centres. The FM spoke about the concession in the ‘Attracting global business and investment’ section of her Budget speech. “Recognising the need to enable critical infrastructure and boost investment in data centres, I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India,” she said.However, Sitharaman said that such data centres availing the tax benefits also need to provide services to customers in India. “It will, however, need to provide services to Indian customers through an Indian reseller entity.”The FM also said that the Budget proposes to provide a safe harbour of 15 per cent on cost in case the company providing data centre services from India is a related entity.