Industry Body For Keeping Recharge Coupon Sellers Out Of GST Net

New Delhi: Industry body COAI today said that government should keep the GST rate on teleom service at 12 per cent and exempt recharge coupon sellers from the tax ambit.

"We want that GST levy should be kept at lower side of 12 per cent on telecom services because it is an essential service. The GST should be paid by telecom operators on the MRP on which the services are sold and not on the recharge coupon seller who get very low margin on each sale. Tax compliance will make it tough for them to do business," COAI Director General Rajan S Mathews said.

The Goods and Services Tax Council has proposed a four-tier structure of 5, 12, 18 and 28 per cent.

The Cellular Operators Association of India (COAI) said telecom operators can manage tax compliance but it will be difficult for recharge coupon sellers to allocate their resources for it.

There are about 30 lakh distributors and retailers engaged in the resale of reacharge coupons.

"On estimated basis at 18 per cent, which is on higher side, the tax revenue shall not exceed Rs 2,000 crore on annualised basis across the country from recharge sellers.

Thus, levy of GST on MRP, payable by telecom operators is a logical step as it ensures full tax revenue for the central as well as state governments," Mr Mathews said.

The telecom industry is regulated on the basis of 22 mobile telecom circles, out of which 12 circles are having geography spread across more than one state.

COAI has urged the Government to consider that restrictions based on state geographical boundaries are not imposed for tax compliance purposes.

"Since telecom services are supplied seamlessly across the country and it is impossible for the industry to track, value and comply for inter-state transactions in multi-state circles," Mr Mathews said.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)