Tech Telecom

Most mobile phones may get costlier with the government imposing a goods and services tax (GST) ​​of 12%​, tak​ing away the benefit under duty differential that was being offered to local manufacturers​. ​Experts said government will have to come up with incentives ​by July 1 ​to ensure that Make in India remains an attractive proposition for contract manufacturers like Foxconn.

The telecom industry expressed dissappointment over the introduction of the Goods and Service Tax rate of 18 percent on telecom services and said that this would further stress the already bleeding sector. Currently, 15 percent service tax applies to telecom services.

“Telecom industry hails GST as an iconic reform, but we are disappointed with announced rate of 18 percent. We had submitted to the govt that consideration must be given to the present financial condition of the sector and any rate beyond the existing rate of 15% makes the telecom services more expensive for the consumer. It will augment the existing burden of the industry further,” Rajan S Mathews, Director General, COAI said in a statement.

Mobile users will have to spend an extra Rs 30 towards if their monthly phone bill is Rs 1,000 after imposing GST.

Most mobile phones may get costlier with the government imposing a goods and services tax (GST) ​​of 12%​, tak​ing away the benefit under duty differential that was being offered to local manufacturers​. ​Experts said government will have to come up with incentives ​by July 1 ​to ensure that Make in India remains an attractive proposition for contract manufacturers like Foxconn.

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.