Telecom industry concerned over service tax rate under GST: COAI

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SME Times News Bureau | 31 Jan, 2015
The telecom industry is concerned at the increase in service tax from current 12 percent under the Goods and Services Tax (GST) would increase the cost of service, the Cellular Operators' Association of India (COAI) said in its budget recommendations to the finance ministry.

"The draft laws, rules and procedures should be circulated for comments and the final law should be made available at least six to eight months before the date of implementation of GST. Since, place of supply rules for telecom services are distinct in almost all the overseas jurisdictions, India would also need distinct place of supply rules for telecom services under the GST regime," said COAI, the GSM body in India.

In last year's budget, exemption from payment of customs duty was withdrawn on import of specified telecom products without mentioning the specific name or description of the products.

The COAI has requested that the specific names of these items or products should be stated, without which classification of goods have become ambiguous.

It also said that in the last budget, the rate of interest on delayed payment of service tax was increased to 30 percent. "This rate of interest is not compensatory but penal in nature and the same should be reduced to a more reasonable rate," the COAI said.