Telecom services to become expensive under GST

At present, telecom consumers are charged 15 per cent in form of tax and cess over their phone bills.

PTI
New Delhi, Publish Date: May 20 2017 12:23AM | Updated Date: May 20 2017 12:23AM
Telecom services to become expensive under GSTRepresentation Pic

Telecom services are set to become costlier under the upcoming Goods and Services Tax (GST) regime with the government placing them under the 18 per cent rate.

Finance Minister Arun Jaitey today told reporters after the GST Council meeting in Srinagar that telecom and financial services will be taxed at a standard rate of 18 per cent.

Debt ridden telecom players, looking for a bail out package, expressed disappointment with the rate saying telecom services will become expensive for consumers and impact the government project like digital India and digital payments.

At present, telecom consumers are charged 15 per cent in form of tax and cess over their phone bills.

"Telecom industry hails GST as an iconic reform but we are disappointed with announced rate of 18 per cent," mobile industry body COAI's Director General Rajan S Mathews said in a statement.

"We had submitted to the government that consideration must be given to the present financial condition of the sector and any rate beyond the existing rate of 15 per cent makes the telecom services more expensive for the consumer," he said.

The 18 per cent tax under GST regime will augment the existing burden of the telecom industry further, he added.

"This is also likely slow down the planned rollout of infrastructure across the country and will have an impact on flagship govt initiatives like digital India, cashless India and others," Mathews said.

The Cellular Operators Associations of India (COAI) said that the telecom sector pays around 30 per cent of its earnings in taxes and levies, including spectrum usage charge and licence fees.