The Associated Chambers of Commerce of India has called on the Indian Government to release guidance on how the value added services provided by the telecoms industry will be taxed under the proposed goods and services tax.
"Given the broad framework of GST, it is expected that even under the proposed GST regime, the telecom service providers may face significant challenges. For the first time, both the Centre and State governments will have powers to tax services… The proposed GST law should support the Government's overall initiative of ease of doing business and offer a simplified tax regime to telecom service providers," a paper prepared by ASSOCHAM and KPMG says.
Taking the example of ring tones, ASSOCHAM said that currently some states levy both service tax and entertainment tax.
In particular, ASSOCHAM is calling for guidance on the taxation of value added services, infrastructure sharing arrangements, and e-commerce transactions. It also called for further guidance on the place of supply of pre-paid services, B2B transactions, B2C transactions, and mobile wallets.
As a simplification measure, ASSOCHAM has called for single unified registration for all states, with revenue division centralized without the involvement of operators.