The IT industry is breathing a sigh of relief with the US government allowing the law imposing a $2,000 tax on H-1B visas to lapse.

Passed on August 2010, the law raised H-1B and L-1 visa fee per application by $2,000 and $2,250, respectively, for companies with 50 or more employees in the US and if more than 50 per cent of the employees were non-immigrant workers on these visas.

Though targeted mainly at Indian IT companies, the fee was used to strengthen the porous US-Mexico border, by deploying an additional 1,500 National Guards, unmanned drones and other measures. The duration of law, which was expected to end in September 2014, was extended by another year under James Zadroga 9/11 Health and Compensation Act of 2010. The extended time period ended on September 30, which means effective October 1, the fee is no more applicable. However, the industry still fears a fresh legislation might bring back the tax. “We have to wait and see how this plays out because as an industry we are happy and we welcome the removal of this fee and we hope it does not come back in any form,” Nasscom President R Chandrashekhar told BusinessLine .

Calling the tax ‘discriminatory’, Chandrashekhar said, “This fee was imposed at a time when the US border security issue had to be addressed. So they had to provide security at the border. So even though it had nothing to do with the tech industry, very strangely US enacted a legislation, which imposed $2000 fee on all H-1B visas.”

According to Nasscom, the Indian tech industry supports over 410,000 jobs through their US operations and paid over $20 billion in taxes to the US Treasury between FY2011 and FY2015. The industry also contributed over $375 million during this period to the US Treasury, including helping America secure its borders.

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