Telecom department will consult Finance Ministry on genuine GST problems: Manoj Sinha

Telecom department consult Finance Ministry on GST problems

The telecom department will look into the impact of the goods and services tax rate of 18% on mobile phone charges and may approach the finance ministry if consumers or companies face problems.

The telecom department will look into the impact of the goods and services tax rate of 18% on mobile phone charges and may approach the finance ministry if consumers or companies face problems.

The tax rate for telecom services, set by the GST Council from July 1, is higher than the 15% that consumers paid as taxes and cess in the previous regime. “If there are genuine problems, then definitely I will consult the finance minister… We will analyse what people were paying earlier, the impact of GST, and whether input credit is being passed on to consumers,” Sinha said Monday.

The minister said the department had no immediate plan of approaching the GST Council or the finance ministry in this regard.

Telcos have said the higher tax rate will inflate costs for consumers. The government had asked operators to cut prices of services by rejigging costs to factor in the benefits of increased tax credits under GST. According to the finance ministry, the additional input tax credits would be “as much as 2% of the turnover of the telecoms industry.”

However, telcos disagreed with the contention. Sinha conceded there may be difficulties for companies to claim input tax credit since they operate across states. “This is an operational issue… let us see how to resolve this,” he said. Sinha said his ministry is keeping a close watch on the sector with regard to GST implications and will take a call “very soon.”

Separately, the ministry proposed an outlay of Rs 42,068 crore for its key project of providing broadband connectivity to 1.5 lakh gram panchayats – Bharat Net, which it is speeding up. A department official said the proposal, which includes Rs 11,148 crore for the first phase, Rs 18,792 crore for the second phase and expenses for last-mile connectivity, operations and maintenance, has been sent to the Cabinet for approval.

Source : http://economictimes.indiatimes.com/news/economy/policy/telecom-department-will-consult-finmin-on-genuine-gst-problems-manoj-sinha/articleshow/59639748.cms

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *