Final GST rates evoke mixed reaction from Telecom sector

The telecom sector was disappointed at being taxed 18 per cent. Uday Pimprikar, tax partner, EY India, said this could increase the overall tax burden.
Final GST rates evoke mixed reaction from Telecom sector

NEW DELHI: The 14th Goods and Services Tax (GST) Council meeting, chaired by Finance Minister Arun Jaitley at Srinagar on Friday, agreed to fit many products in various tax brackets. Industry and analysts gave mixed reaction to the decisions.

The telecom sector was disappointed at being taxed 18 per cent. Uday Pimprikar, tax partner, EY India, said this could increase the overall tax burden.

Rajan S Mathews, director-general, Cellular Operators Association of India, said, “This will likely slow down the planned rollout of infrastructure across the country and will have an impact on government initiatives like Digital India, Cashless India and others.”

Vinod Dasari, president of Society of Indian Automobile Manufacturers, said: “The inclusion of 10-13 seater vehicles used mainly for public transport in the same tax bracket as luxury cars with a 15 per cent cess may merit a review.”

He said lower taxation should continue on vehicles with green technologies.

“The price of small cars may increase marginally post GST, while OEMs would pass on the benefit of lower taxes on bigger vehicles and SUVs to customers,” said Subrata Ray, senior group vice-president at ICRA.

Dinesh Shahra, founder and managing director of Ruchi Soya Industries, said the government should take a relook at the GST rates of 12 per cent on Soya Bari and five per cent on soya flour.

On a positive note, Anshuman Magazine, chairman, India and South-East Asia, CBRE, said the removal of various tax barriers and creation of a common market will improve supply chain efficiency and attract more FDI.

“GST on gambling at 28 per cent can’t be faulted but this will lead to this activity going underground,” said V S Datey, senior consultant, Taxmann.

Archit Gupta, founder and CEO of ClearTax, said, “What remains to be seen is whether the coverage and registrations are significantly higher and that enterprises are ready to pass on benefits to the final consumer.”

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