The telecom ministry is monitoring the impact of the goods and services tax (GST) on consumers and will also analyse whether the operators are passing on the benefits they receive through input tax credit (ITC) to the subscribers.
“We will analyse what the people are paying now as well as before GST came. We will also analyse the impact of GST, both on consumers and telecom operators, and whether the input credit that the companies will get is being passed on to the consumers,” telecom minister Manoj Sinha told reporters.
Telecom services are being charged at a rate of 18% GST, whereas earlier they attracted a service tax and cess of 15%.
With ITC, the effective tax will come down, the minister said, adding that companies are facing some operational issues in claiming the ITC due to their operations spread over different states, which the ministry is looking into.
Sinha, however, added that in case there are “genuine problems”, the ministry will approach the finance ministry.
“At present, there are no plans to approach the finance ministry or the GST Council, but we are keeping a close watch and will take a call very soon based on the billing pattern,” he said.This comes against the backdrop of the finance ministry’s statement in May that telecom companies would be required to rework their costing and credits availability and rejig their prices post-GST and ensure that the increased availability of credit is passed on to the customers by lowering their costs.
During the same month, revenue secretary Hasmukh Adhia had said: “While the customers’ bill will still show 18% GST, the tariff should be lowered as the cost will go down for operators. Ideally the mobile companies should provide a breakdown of costs either in individual bills or put out the same on their website.”
The view of the industry is that a rate beyond the existing 15% makes telecom services more expensive for the consumers.