Cellular Operators Association of India (COAI) – apex body of telecom service providers in India has represented to government that GST rate on telecom service should be at 12 per cent and recharge coupon sellers should be exempt from the tax ambit.
COAI is pitching telecom service as ‘essential service’ and thus should be taxed at 12 per cent.
“On estimated basis at 18 per cent (GST rate), which is on the higher side, the tax revenue shall not exceed ~2,000 crore on yearly basis across the country from recharge sellers. Thus, levy of GST on maximum retail price, payable by telecom operators, is a logical step as it ensures full tax revenue for the central as well as state governments,” Rajan S Mathews, director-general, COAI, said.
“The GST should be paid by telecom operators on MRP on which the services are sold and not on the recharge coupon seller who get very low margin on each sale. Tax compliance will make it tough for them to do business,” Mathews said. There are three million distributors and retailers engaged in the sale of recharge coupons. COAI said the four-tier structure announced by the GST council was one of the biggest indirect tax reforms in India.