Will the 18% GST Rate Increase the Overall Number of Unlimited Plan Subscribers?

By July 4th, 2017 AT 12:53 PM

The Government of India introduced GST on July 1, 2017. Under GST, goods and services fall under five tax categories: 0%, 5 %, 12 %, 18 %, and 28 %. The Goods and Services Tax (GST) Council has put telecom services under the 18% slab. Before July 1, 2017, telecom services were taxed at 15%. The 3% increase will reflect in the bills of the postpaid users. For the prepaid users, there will be a deduction in the talk time.

India

Let us understand the impact of GST on prepaid and postpaid subscribers with the help of an example.

Assume that the postpaid bill of a subscriber is Rs.100. With an earlier tax rate of 15%, a subscriber had to pay Rs.115. Now with the introduction of GST, the final bill pay will be of Rs.118.

The effective talk time for prepaid customers will reduce now. If a subscriber recharges a number with a Rs 100 prepaid voucher, talk time will be Rs 81.75. Before GST the talk time was Rs.83.96.

EarlierNow
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101.3017.701.5317.47
202.61215.393.05214.95
303.91323.094.58322.42
506.52340.484.63339.37
10013.04383.9615.25381.75

Idea More Than Full Talktime Plans

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550575550
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*Inputs : Deepesh Arora
It is to be noted that the recharges done through paper vouchers billed to recharge distributors before July 1 will still attract 15% tax only. So subscribers can enjoy 3% more talk time on these recharge paper vouchers after July 1 till the old stocks last. For net savvy subscribers, there is no such leeway on recharging online. Netizens have to shell out 3% more on recharge from July 1 onwards.

With every incumbent coming up with Unlimited plans and Increase in the tax rate, many subscribers will opt for unlimited plans. GST may not have much impact on the subscribers availing unlimited packs. We anticipate there will not be any increase in the price of unlimited plans and no decrease in the FUP quota limit of these unlimited plans.

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