GST is Goods and Service Tax. This New GST is a destination based indirect tax where both Central and state government would simultaneously levy tax towards the supply of goods and services.
New GST would replace most of the current indirect taxes i.e. excise duty, service tax, value added tax, Central sales tax, entry tax extra Jesse being a transaction tax would have large scale implications on all business transactions.
Telecom sector regulates by Telecom Regulatory Authority of India (TRAI). Different types of licenses granted by Department of Telecommunications (DOT) for the provision of telecom services i.e. Voice and data services, Career service, Access service. License holders can provide only the services for which it obtains a License.
Carriage services include National Long Distance(NLD), International Long Distance(ILD) services. NLD license and ILD license is issued for the provision of NLD and ILD services respectively on Pan India basis.
GST in Telecom Industry
Telecom services are complex and involve the delivery of seamless and bundle connectivity services for voice, data, carriage and other access services. Services availed more than a billion subscribers (both B2B and B2C) across geographical boundaries covered under the new GST.
The current regulations and process described by the government should visit in light of the new GST regime. Telecom services are unique on account of the following. Under this new GST, the services taxed at the 0%, 5%, 12% and 18% respectively.
Telecom service is one of the most necessary and critical infrastructure services and designated as essential services under essential services maintenance act 1963.
India comprises of 29 states and seven union territories. However, for licensing purpose, the country divides into 22 service areas or circles for providing cellular mobile services.
In that 12 such service areas/circles cover more than one state. Along with the nature of duty, the distribution chain related to the provision of services is always evolving.
Here BSNLTeleServices provides the info about which are the key positions adopted by the Telecom Industry in light of the new GST regime. The categories divided into four types which cover new GST on telecommunication services.
- Installation based services.
- Interconnect Usage Charges(IUC).
- Postpaid Connections.
- Fixed Line Connections.
Installation based services of Telecom covered under new GST
- National Private Leased Circuits(NPLC)
- Multi- Protocol Label Switching(MPLS)
- Internet Leased Line(ILL)
- International Private Leased Circuit(IPLC)
- Generalized Multi-Protocol Label Switching(GMPLS)
- Primary Rate Interface (PRI)
- Video Conferencing
- Indefeasible Right to Use(IRU) for lit fiber
- National dedicated Ethernet
2. Interconnected Usage Charges(IUC)
3. Post Paid Connection
- Place of supply: For Individual Owned Individual Paid (IOIP) connections Company Owned Individual Paid Connections (COIP), Place of supply shall be billing address of the recipient on record of BSNL as on the date of invoicing.
- ‘Bill from location’ in this case was the state in which place of supply for postpaid connection occurs where the bill to address is within the same circle.
- For Company Owned Company Paid Connections(COCP), “bill from location” should be the local address of each circle in case of multi-state circles as per individual customer application form.
- For example, an Enterprise customer procures SIM cards for Maharashtra Goa circle and Gujarat circle. However contractual billing address provided by the client is of Bangalore. In this
- In this case, Maharashtra Goa circle and Gujarat circle would raise invoices from the local address of said Circles to the enterprise customer with CGST + SGST of the states of Maharashtra/Goa and Gujarat.
4. Fixed landline connections of Telecom under new GST
- Place of Supply: For fixed telecommunication lines i.e. for landline services, place of supply shall be the location where the installation has taken place
- Example: – Installation address of the landline equipment on record of BSNL as on the date of billing. Bill from area, in this case, was the state in which place of supply for Landline connection occurs with the bill to address is within the same circle
- In the event of a change in billing address during the billing cycle, it agreed that BSNL would raise invoice and billing address as on the date of billing and there would not split invoicing. From 01.01.2017 BSNL has modified the customer application form including GST guidelines.