Telecom subscribers and cooking gas consumers in Jammu and Kashmir will now have to shell out more money as both telecom services and domestic LPG now will be taxed 18 percent and 5 percent under new Goods and Services Tax ( GST) to be implemented from midnight in the state.
Telecom sector which was tax-free in J&K till now has been put under 18 percent tax bracket, means that a user would get a talktime of about Rs 80 to Rs 82 on a recharge of Rs 100, instead of Rs 97 to Rs 100 earlier. Similarly, a monthly bill of Rs 500 would now be charged Rs 90 extra as GST.
Domestic cooking gas on the other hand will become costlier by Rs 30 to Rs 35 across J&K. This increase is due to the 5 percent tax that has been levied on subsidized cooking gas under GST.
VAT or sales tax on LPG cylinders was nil in J&K alongwith few more other states across India till GST came into existence. Prior to implementation of GST, no tax was levied on telecom services in J&K which included landline, mobile and data services, despite the state government was having power of taxing services.
According to a telecom company executive, state-owned Bharat Sanchar Nigam Limited (BSNL) generates monthly revenue of Rs 5 crore to Rs 6 crore for landline and mobile prepaid services alone, which will now attract tax of Rs 95 lakhs to Rs 1 crore.
"All this tax burden will have to be borne by the subscribers. What is worrying is that the every time the state especially Kashmir which is a booming telecom market tries to register a growth, there is some kind of a spoilsport which comes into play," said a telecom executive not wishing to be named.
Cellular Operators Association of India ( COAI) , an amalgamation of GSM mobile players has welcomed implementation of GST. However, the umbrella body has urged the central government to bring down taxes on telecom industry to 5 per cent since telecom being an essential service and critical infrastructure.
Director General, COAI, Rajan S Mathews while speaking to Greater Kashmir on telephone said in a state such as JK where customers enjoyed tax-free service, GST is likely to have a negative impact on customer demand.
"Like any other services customers will have to pay the taxes. However, because of fierce competition in the telecom sector, some service providers might absorb the taxes by increasing talk time or providing other value added benefits to subscribers. But overall it will likely have a negative impact on customer demand," Mathews said.
Meanwhile, according to an LPG distributor, cooking gas cylinders in across J&K will become costlier and now cost Rs 680. The distributor said even mechanic service, installation of new connection and issuance of new gas card has been levied with 18 per cent tax.
"Domestic gas was exempted from tax in J&K till now as this tax was applicable only on commercial cylinders ( 19 kg). But now a domestic cylinder which used to cost Rs 647 in most parts of Jammu and Kashmir after GST would cost Rs 680. This certainly is a huge burden on the pocket of the consumer who used to enjoy VAT/sales tax-free LPG across the state," an LPG distributor said.