Looking at the impacts of GST regime: Manoj Sinha

The GST is all set to be launched on July 1 and will have rates of 5, 12, 18 and 28 percent.

    Telecom Minister Manoj Sinha today said that he is looking at the impacts of Good and Services tax (GST) regime as the council has fixed 18 percent tax rate on telecom services.

    Looking at the impacts of GST regime: Manoj Sinha

    He said, "the telecom operators have already been paying 15 percent tax so there is 3 percent difference. We are considering that at our level."

    He added, "they (telecom companies) will also meet GST Council members. We are monitoring it seriously at our level."

    The sector is also very disappointed with the new tax slap and said the present financial condition of the sector and any rate beyond the existing rate of 15 percent makes the telecom services more expensive for the consumer.

    SEE ALSO:HP Inc led the market with a 29.5 % share in Q1 2017, IDC

    "It will augment the existing burden of the industry further. 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," said Rajan S Mathews, Director General, COAI.

    He said it is noteworthy here that the telecom sector pays around 30 percent of its earnings in taxes and levies, including spectrum usage charge and license fees. Due to a number of reasons including hyper-competitiveness, the sector has come to a point that can be seen as just short of needing a bail-out. Total debt for the sector is at around Rs. 4.5 lakh crore while revenues are around half of this. Despite this, tariffs have been going in the opposite direction of inflation.

    Similarly, Uday Pimprikar, Tax Partner, EY India said that "Imposing 18 percent tax on telecom is likely to increase the overall tax burden and therefore may have a negative impact on the consumers' expenses. It needs to be appreciated that telecom is a necessity and an extremely important infrastructure service & resource and thus deserves more sensitive treatment."

    The GST is all set to be launched on July 1 and will have rates of 5, 12, 18 and 28 percent.

    Read More About: tax news telecom

    Stay updated with latest technology news & gadget reviews - Gizbot

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Gizbot sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Gizbot website. However, you can change your cookie settings at any time. Learn more