Telcos Demand GST Relief on Telecom Services for 6 Months

Telecom Operators have been facing default and delay in payments amid the outbreak of Covid-19

The outbreak of COVID-19 has disrupted the financial status of people around the globe. Various companies have started cutting salaries, terminate the workforce to maintain the financial stability of their enterprise. Due to the outbreak of the deadly virus, telecom operators have also been facing default and delay in payment, and the numbers are increasing extensively. However, telecom operators have urged the government to levy the goods and service tax (GST) on actual payments received from customers. As reported by ET Telecom, Vodafone Idea, Bharti Airtel and Reliance Jio have asked for a change in the existing 18% GST regime for a period of six months.

GST on Bad Debts Will Create Trouble Telecom Operators

Abhishek Jain, who is a tax partner at EY, stated that GST on bad debts amidst the outbreak of COVID-19 is a real issue, and something needs to be done to avoid litigation. Also, telecom operators are demanding that they should be allowed to pay GST on actual receipts as against on the date of raising the invoice. Since the lockdown period was announced by the government to combat the deadly virus, the telecom sector has been facing massive financial distress because of default and delay in payments. The reason for delayed payments is still salary cuts, job losses, business closures which are happening amid the lockdown period.

Telcos are Restructuring their Business Models

In other news, telecom operators are restructuring their business models to ensure a smooth flow of services post lockdown period. Telco giants Bharti Airtel, Vodafone Idea and Reliance Jio, are focusing on automation tools, chatbots and digital recharges to ensure that social distancing norm is followed and call centre operations are minimised. With the new business structure, telcos will be able to slash 20 % cost from call centre operations. Also, telecom operators have opened retail stores with all the precautionary measure to ensure the safety of staff and customer. Apart from this, telecom operators have also teamed up with various entities to offer recharge facilities to its subscribers. Telecom operators Vodafone Idea, Reliance Jio and Bharti Airtel, have teamed up with various banks to offer accessible recharging facilities amid challenging times.

Shrijan loves the process of creating content in various verticals, whether it be words, sounds or videos. He's also inclined towards digital marketing and tech industry developments. The art of creation always intrigues his interest.

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