GST effect: Mobile bills to get dearer

Rujuta Parekh
Tuesday, 4 July 2017

Seeking revision

- Director General of COAI Rajan Mathews said, “We are hopeful that the government will consider our plea and revise the current rate of 18 per cent, which is fairly high to the requested rate of five per cent that is better aligned with telecom being an essential service and critical infrastructure.”
- Mathews also said that the industry today is saddled with an unprecedented debt of more than Rs 4.5 lakh crore, with revenues of less than Rs 2 lakh crore and a return on capital employed averaging around 1 per cent.

Pune: The use of mobile services is set to get dearer for millions of users across the country, as the tax on the same has been increased to 18 per cent under the newly rolled out Goods and Services Tax (GST). The tax levied on telecommunication services in the previous tax regime was 15 per cent. 

Due to the 3 per cent rise in tax rates, prepaid as well as postpaid customers are set to feel the pinch, as recharges will offer lesser benefits and mobile bills will be greater.

Speaking to Sakal Times, an official from a leading mobile service provider said that consumers will certainly have to shell out more for mobile services under GST. “The bill amount for postpaid customers will rise to accommodate the additional tax. Meanwhile, the benefits extended to prepaid customers will reduce. For example, if a person recharges his/her prepaid number for Rs 100, he would earlier get a talk time of Rs 85, but that will now reduce to Rs 82,” the official said.

The official said that in cases of full value recharges available in the market, the telecom companies were bearing the tax amount. “Under GST too, telecom companies might bear the tax to ensure that consumers get full value for money,” the official said.

While the Cellular Operators’ Association of India (COAI), the apex industry association representing all major telecom service providers and allied Internet and technology companies in India, has welcomed the new tax regime. They have also sought revision of the tax rate on mobile services.

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