Service tax will hit Telecom sector

Chennai:
The rise in Service Tax from 10 per cent to 12 per cent will increase
cost of services to customers and also impact the telecom companies,
according to Sanjay Kapoor, CEO - India & South Asia, Bharti Airtel.
“As a highly taxed industry, this will certainly have a further impact
on the consumer. We see proposals on mobile based fertilizer subsidy
tracking and heightened IT enablement as factors that will as
opportunities to drive the growth of ICT,” he said. Additionally,
finance minister’s recommendation for gap funding of telecom towers,
cables and optic fibres should lead to reduction in cost of capital
for telecom infrastructure, Kaspoor said.
“Reduction on duties on mobile parts should enhance affordability and
stimulate demand for mobile services across the country,” he added.
However, we must keep in mind that the life of the telecom sector does
not wholly depend on the budget pronouncement - only the sentiment
needs to be positive, Kapoor said.
“We hope this budget will be a harbinger of a healthy telecom policy,
which would be inclusive and enable viability of the industry at
large,’ he added.