Telecoms Firms Urged To Pass On Indian GST Windfall

by Mary Swire, Tax-News.com, Hong Kong

31 May 2017

Telecommunications firms doing business in India have been urged to ensure that any savings resulting from the introduction of goods and services tax (GST) in the country from July are passed on to consumers.

Telecommunication service providers currently pay service tax at 14 percent, with an additional 0.5 percent Swachh Bharat Cess (a centrally imposed tax, with revenues ring-fenced for environmental initiatives), and the Krishi Kalyan Cess (similar to the SBC, but with revenue going towards improving agricultural facilities) of 0.5 percent.

Under the GST regime, telecommunication services will attract GST at a rate of 18 percent, with full input tax credits available. The Government has estimated that the industry will be able to recover GST worth about two percent of their turnover and has called on companies to pass on the tax relief to service users.

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