18% GST rate disappoints telecom industry

GST

(Photo: Getty)

The telecom industry on Friday expressed disappointment over the 18 per cent Goods and Services Tax (GST) rate, saying it will further stress the already-bleeding balance sheet of the sector.

“Telecom industry hails GST as an iconic reform but we are disappointed with the 18 per cent rate. We had submitted to the government that consideration must be given to the present financial condition of the sector and any rate beyond the existing rate of 15 per cent makes the telecom services more expensive for the consumer,” said Rajan S Mathews, Director General, Cellular Operators' Association of India (COAI).

“It will augment the existing burden of the industry further. This is also likely to slow down the planned rollout of infrastructure across the country and will have an impact on flagship government initiatives like Digital India, Cashless India and others,” he added.

“As an essential service, the telecom industry needs some benefits and tax relaxation in order to provide a seamless and hassle-free service. The industry has worked tirelessly and has fulfilled its motto of connecting everyone till the last mile connectivity,” Mathews said.

Considering the massive impact of GST the operators have already initiated the registration process involving migration to the GST regime, the COAI said. However, the telecom industry body said clarity is still awaited on certain aspects of the published rules and the implementation is highly dependent on IT compatibility that requires sufficient time.

The GST Council concluded its latest round of meetings on Fridaywith the decision to apply the same four-tax rate slabs for services as for goods, exempting, however, healthcare and educational services from the purview of the GST.

The next meeting will be held on 3 June.