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Thursday, May 28, 2015

Exclusive: Postpaid Bills & Prepaid Tariff to Cost More as Service Tax increased to 14 percent from 1st June 2015 onwards

The new service tax rate of 14 percent will come into effect from 1st June 2015 onwards across India. The service tax is currently levied at the rate 12.36 percent including education cess. The education cess and secondary and higher education cess shall be subsumed in the new service tax rate.


Service tax is applicable to all services ranging from train tickets and restaurant bills to telephone ( landline / mobile ) bills and tariff.  Prepaid Recharge tariffs advertised by the operator are inclusive of service tax while postpaid tariffs advertised are exclusive of service tax.

From 1st June 2015 onwards, your total postpaid bill ( landline / mobile ) amount will be higher by 1.64% due to the increased service tax rate.

Prepaid Mobile customers also will be affected by this hike in service tax. For prepaid customers, the operator will normally reduce the freebies and talk time offered with recharge / top up vouchers by keeping the denomination unchanged.

As per telecom analysts, currently the telecom industry is under a lot of stress and operators aren't even passing the cost of spectrum to the users but since they can't go on endlessly absorbing all costs, this might translate into a slightly higher bill.

The hike in revenue of telecom operators due to the increase in service tax is about 2 percent of total revenue. Operators may have to revise their tariffs structures for prepaid customers, as their ability to offer full talk time on some vouchers will go down by about 2 per cent.

This is the reason why BSNL recently announced the revision of it's 3G/2G prepaid data offers from 01-06-2015 by reducing the validity of Data STVs. See it's details below:

We may expect major tariff hike from other private operators in the coming days.

Dear readers, please share your views and opinions about this latest news via  comments with us.

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