Getting the GST Rate Right

The GST rate will impact e-commerce and telecoms in India. If Modi wants Digital India to succeed, he will have to get the rate right.

Times of India reports that India's top telcos have urged the government to resolve a bunch of sticky issues before implementing the goods & services tax (GST) regime, calling for uniform rate across states/union territories (UTs), with a cap of 15%. A higher GST rate, they said, would drive up cost of provisioning services, and in turn, hurt both prepaid and postpaid consumers by way of higher phone bills.

The call for a uniform tax rate for telecom services under the proposed GST regime stems from the fact that circle boundaries are not in sync with geographical borders of states/UTs in several cases. Failure to do so, they said, could lead to tax complications in some big markets with the prospect of differential levies within the same circle, resulting in pricing discrepancies, non-compliance, customer complaints and business disruption.

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