Telecom industry disappointed at unchanged GST rate

Will result in higher cost to consumers, says Coai
New Delhi: Industry body Coai on Sunday expressed its concern over GST rate for telecom services as it remained unchanged at 18 per cent. The Cellular Operators Association of India (Coai)-- which has Bharti Airtel, Vodafone, Idea Cellular and Reliance Jio as members-- has been pushing for lowering of Goods and Services Tax (GST) rate, for telecom services to five per cent in sync with essential services.

Highlights:

• 18% GST on telecom services
• Demands for 5% GST
• At present, 15% tax & cess on phone bills

The debt-ridden industry has been saying that benefit of input credit is not enough to fully compensate the higher tax incidence in the new regime, and that telecom services are bound to become expensive for consumers once the new rates come into effect. At present, telecom consumers are charged 15 per cent in form of tax and cess over their phone bills.

Coai Director General Rajan S Mathews said: “We’re disappointed that there has been no change in the GST rate for telecom, which is an essential service. It will increase the cost to consumers.” The GST Council, chaired by Union Finance Minister Arun Jaitley and having state counterparts as members, on Sunday lowered tax rates on 66 of the 133 items demanded by various sections of the industry.

Asked if there would be any further revision of rates, Jaitley said the fitment committee and the GST Council have gone into the depth of all the cases and whatever rates have been decided are based on ‘informed reasons’ and ‘detailed discussions.’