Nation

GST to raise mobile, broadband bills

June 29, 2017 04:34 PM

Chandigarh:Brace for higher broadband and mobile bills from next month as GST  (Goods and Services Tax) kicks in from July 1. Telecom services have been put under the 18 per cent bracket under the new tax regime compared to the 15 per cent tax levied in the pre-GST regime."Due to the GST rate of 18 per cent applicable with effect from 1st July, 2017, your recharge amount will increase," said broadband and internet services DEN BOOMBAND, which is part of the NSE-listed DEN Networks.

However, cable and DTH (Direct-To-Home) bills are likely to come down in many states as so far these services attracted an entertainment tax in the range of 10-30 per cent over and above the service tax levy of 15 per cent.

Mobile bills too will increase, Airtel, which is India's largest telecommunications services provider confirmed. "There will be a 3 per cent increase in the bills as the tax incidence goes up to 18 per cent from 15 per cent, which will reflect in your bills," an airtel official said. The increase will be across services, he added. Officials at other telecom companies confirmed the imminent bump in bills.

To break it down, if say your broadband and mobile bill come to Rs 1,000 each every month, you'd be paying a cumulative Rs 2,600 from next month (3% on Rs 1,000 + 3% on Rs 1,000). Similarly, for prepaid customers, the effective talk-time will be reduced, July onwards.

The GST rate of 18 per cent for telecom services has left the industry disappointed. Representatives from the sector argue that telecommunications is an essential service under Essential Services Maintenance Act, 1968, and thus, the tax rate should have been much lower and in line with those for essential products and services.

However, cable and DTH (Direct-To-Home) bills are likely to come down in many states as so far these services attracted an entertainment tax in the range of 10-30 per cent over and above the service tax levy of 15 per cent.

GST is touted as the single biggest tax reform since India's independence in 1947 and is expected to add 2 per cent to India's GDP (gross domestic product). It aims to subsume the various central and state taxes that are currently levied on goods and services, bringing India under a uniform tax regime.

 

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