The Telecom Department has suggested the Finance Ministry that GST for telecom services be lowered to 12 per cent against the existing 18 per cent, Parliament was informed on Wednesday.
The recommendation was made during the process of the Budget exercise, and the matter is with the Department of Revenue under Ministry of Finance for necessary action, Telecom Minister Manoj Sinha said in a written reply to Lok Sabha. “The Department of Telecom dated 1st December 2017 had recommended to the Department of Revenue during the process of the Budget exercise that a standard rate of GST at 12 per cent for telecom service should be fixed in place of existing 18 per cent,” the minister said.
Sinha noted that the Telecom Regulatory Authority of India (TRAI) had favoured reduction of licence fee and Universal Service Obligation levy, cut in Spectrum Usage Charges and relaxation in spectrum pay-out terms, in view of the debt burden on telecom companies.
TRAI felt that a favourable consideration of the matter would help reduce financial stress of telecom players and enable them to offer affordable and quality services to consumers. “The issues are under examination,” Sinha said.
TRAI also found merit in demand of telcos pertaining to reduction in GST rate as well as treating telecom sector as core infrastructure. To a separate but related question on the debt of telcos, Sinha said Interministerial Group tasked to review the financial difficulties of the sector was of the view that while there were pockets of financial stress, the entire sector could not be described as being in financial difficulty.