Impact of GST on Telecom Sector

GST Effect on Telecom Industry

GST roll-out has been a monumental change in the financial structure of the country. Undeniably, effects of GST are largely said to be positive. Being one of the most thought-out and researched tax regime, it has been expected to strengthen the economic facet of India.

But, not all changes after the implementation of GST have been accepted with open arms by the common man. Not all impacts have been of a happy disposition.

One of the greatest impacts of the new tax reform of India has been on the Telecom Sector.

Yes, that means mobile bills have got more expensive.

Also Read: Education Sector Under Goods & Service Tax: The Inevitable Impact

In the earlier tax regime, telecom industry had been facing various shortcomings issues with the classification of services, cascading effect of taxation, etc.

While earlier, the service tax paid by the mobile subscribers was 15%, now after the implementation of GST, it has increased to 18%. The 18% slab rate remains the same for every subscriber, whether the subscription is prepaid or post-paid.

For the consumers, it means that there will be a hike in the post-paid bills and mobile recharge.

For the post-paid subscribers, the 3% change will be reflected in their bill while for the prepaid ones, the consumers will be getting a slightly  lesser talk-time than earlier on recharge of a particular amount. In other words, the effective talk-time will shrink.

Well, the telecom industry seems a little miffed with the move as due to the cut-throat competition, it was expecting a lower rate slab under the new GST regime. However, despite the increase in rates, the unlimited schemes and inviting call plans are expected to bring some relief to the consumers.

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