More reports on: Government policies

Most services to be costlier with GST

news
23 June 2017

Phone-bills, credit card bills and insurance premium are set to increase after 1 July with the GST taking effect.

According to commentators, charges on most services will increase with the tax rate increasing from the current 15 per cent to 18 per cent.

Over the past few days, many service providers including banks, hotels and telecom companies have been sending messages to customers warning of a GST-driven increase in prices starting 1 July.

According to a number of reports, several telecom companies barring state-owned Bharat Sanchar Nigam Ltd had said that monthly bills would rise as gains from input tax credit would not be significant. As input credit for these services is not going to be sufficient, the end-user will have to bear the burden of hiked rates.

However, BSNL chairman Anupam Shrivastava told The Times of India, "Tariff will not be changed in the GST era. They will be maintained. They should remain at the same level."

Insurance companies have also informed policyholders that they would need to pay higher premium, with the maximum impact on pure term insurance plans as the levy was set to increase from 15 per cent to 18 per cent.

While premium of term plans and non-life policies were taxed, only charges (mortality and AMC charges, etc) in other life policies will attract GST.

However, citing financial stress in the sector, companies such as Idea and Airtel had pitched before an inter-ministerial group for telecom to be treated as an essential service and charged lower GST of 5 per cent or 12 per cent, instead of the current 18 per cent.





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