Telcos seek clarity on GST on value added services

Telecom industry has impressed upon the govt to come out with a clear cut position with regard to levy of taxes on VAS

Telecom industry has sought a clear cut position on levy of taxes on Value Added Services under the proposed GST regime, says a paper by Assocham-KPMG.

Certain VAS offerings such as ringtones come under the 'entertainment tax laws' in some states, the paper said, adding that as service tax is also liable on revenue generated from rendering such services, there is a dual levy on them.

The Goods and Services Tax (GST) regime "should provide clear and comprehensive provisions with respect to coverage of telecom services for providing clarity of levy of taxes on VAS, infrastructure sharing and e-commerce transactions, since these transactions could have different treatment under GST", said the paper.

It added: "Telecom industry has impressed upon the government to come out with a clear cut position with regard to levy of taxes on VAS even as the firms across the entire value chain look forward to a smooth transition to much-awaited GST."

The Constitution Amendment Bill for introduction of GST, which will subsume most of the indirect taxes, is widely expected to be approved by the Rajya Sabha during the ongoing Monsoon session of Parliament.

The long-awaited Bill has already been cleared by the Lok Sabha.