The government's decision to put the telecom industry under the 18 per cent tax bracket under the Goods and Services Tax (GST) will impact the industry as well as the consumers, feels the Tower and Infrastructure Providers Association (TAIPA).
"The recent announcement on GST rate of 18 per cent tax levy for telecommunication services will certainly impact the consumer at large," the body said in a statement.
"Further, non-availability of input tax credit to tower infrastructure business will lead to huge impact on the cost of services and billing by Infrastructure Provider-1 to Telecom Service Providers (TSPs), which will either be passed to consumers or it will further add on to the huge debt of TSPs due to the hypercompetitive market," it added.
Tilak Raj Dua, Director General, TAIPA said, the prime objective of the government to introduce GST was to ensure that there is no cascading of taxes.
"Higher tax rate and non-availability to input tax credit defeats the whole purpose of Prime Minister's vision of "One nation, One Market, One Law. In number of discussions with government, we have stated the impact of such non-inclusion and higher tax rates which will further impact the overall financial health of the telecommunication industry," he added.
Dua further said higher tax will impact infrastructure rollout in semi-urban areas and rural areas, regions which have already lagged behind in connectivity either due to inadequate infrastructure or unviable business model.
--IANS
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