Indian Telcos Laud GST Regime, but Demand 5% Rate for Telecom Services

Indian telecom operators welcomed the Indian government’s move to implement the Goods and Services Tax (GST), but reiterated their demand to bring the rate for telecom services from the current 18% to 5%, which they said is “better aligned with telecom being an essential service and critical infrastructure.”

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The Cellular Operators Association of India (COAI), in a statement, said that telecom is all pervasive and as essential service which is today the backbone of the nodal government mission mode programs like Digital India, Make in India, Skill India, etc.

Rajan S. Mathews, Director General, COAI, said that telecom industry is saddled with an unprecedented debt of more than Rs 4.5 lakh crore, with revenues of less than Rs 2 lakh crore, a return on capital employed averaging around 1%, “we are therefore hopeful that the government will consider our plea and revise the current rate of 18% which is fairly high to the requested rate of 5% which is better aligned with telecom being an essential service and critical infrastructure.”

“All the policy changes of this size are bound to face teething problems initially. As long as the government and Industry work together, for the greater good, we are certain that all issues will get resolved. We are also confident that we will get all the required support from the government, DoT and the Finance Ministry for this and both the industry and the government will continue to work in the best interests of the consumers and the nation keeping offerings competitive and innovative,” the body said.