18% GST rates may make telecom services expensive for customers: Telcos

Any rate beyond the existing 15% will further increase the burden on the industry says COAI DG

The telecom industry, expressing its disappointment over the 18 per cent Goods and Services Tax (GST) rates, on Friday said it will further stress the already bleeding balance sheet of the sector and may negatively impact consumers.

"Any rate beyond the existing rate of 15 per cent augments the existing burden of the industry further. This is also likely to slow down the planned rollout of infrastructure across the country and will have an impact on flagship government initiatives like Digital India, cashless India, and others," said Rajan S Mathews, Director General, Cellular Operators' Association of India (COAI). 

The GST Council concluded its two-day meeting in Srinagar on Friday when it agreed on a four-tax slab rate for services. IT, telecom and financial services will be taxed at the rate of 18 per cent, the Council decided.

"As an essential service, the telecom industry needs some benefits and tax relaxation in order to provide a seamless and hassle-free service. The industry has worked tirelessly and has fulfilled its motto of connecting everyone till the last mile connectivity," Mathews added.

Considering the massive impact of GST, the operators have already initiated the registration process involving migration to the GST regime, the COAI said.

However, the telecom industry body said clarity is still awaited on certain aspects of the published rules and the implementation is highly dependent on IT compatibility which requires sufficient time.