The GST provides the power to the states to levy tax on the services. Therefore, compliance requirement and a decentralized registration would have to be having an appropriate definition of “the place of supply” for avoiding the controversies associated with the judicial system.
Although there is a separate clause of “place of the supply provisions” affiliated with the telecom Formation Of A New Company services yet there are probabilities of disparities occurring because of the distinction persisting on the nature of the service, that is, pre-paid or post-paid and the methodology adopted for the payment that is, recharge vouchers or e-payment.
The basis for the determination of the place of the supply is the address of the recipient therefore; the telecoms possess enormous responsibility of keeping their database updated. Operation of the telecoms is on the basis of the circles or areas that have nothing to do with the geographical areas. Therefore, accounting to be done as per the state wise revenues would require an enormous overhaul of the accounting system.
Another imperative aspect is the services, intra circle roaming and intra circle termination, for the same operator especially in case of the multi-state circles. There is no mechanism Inventory Management In India available with the telecoms as of now for tracking roaming supplies and intra circle termination. Additionally, the aspects of the valuation need to be specifically addressed in case of self-supplies as these appear to come under the tax net as per the proposed GST regime. Furthr, it becomes pivotal that Multi state registrations should be replaced by a single PAN-India registration.
Though the debate related to the finalization of the rate of the GST is still on (18% is suggested by the chief economic advisor’s report). It is expected that the GST would bring in sudden rise of charges for the ultimate consumers of the services of the telecoms attracting a tax rate of fifteen percent today.
Since there wouldn’t be any uniformity of GST rates across states therefore, the recharge coupons to Roadmap Of Ind AS Implementation be priced for the pre-paid customers would create issues. Also, the draft model of the GST does not address the problem of the invalid credits related to the expenditure being done on the passive infrastructure therefore; the room for the credit blockages does persist. This negates the flow of the credit seamlessly and provides room for the litigation.
For telecom equipment and service provider composite supply’s concept needs to be addressed. The compliance requirements because of the GST would impact the telecoms extensively. As of now there is single registration and two to three returns but with the coming of the GST manifold returns would have to be filed. Also, assessments Top GST Consultant In India would have to be done separately and audits in each and every state would also have to be done. The new GST regime would result in making of a box for the telecoms associated with the taxability of the recharge coupons, SIM cards, etc.
The concerns associated with this sector need to be addressed effectively and efficiently.
For seeking suggestions associated with the GST, Implementation of GST or Roadmap To GST In India, Contact AKGVG & Associates in New Delhi, India.
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