Your Mobile Bill May Shoot Up By 2% On R&d Cess

[savramesh 37]

Source

NEW DELHI: India’s 560 million cellphone users will pay an extra 2% of their mobile bills as R&D cess to boost the country’s manufacturing of telecom equipment, in case the government accepts a communications ministry proposal. If implemented, this will add another levy to mobile users who currently pay 12% service tax and a 2% education cess on their bills.

The telecom department first floated this proposal in 2006, but did not press for implementation. It now wants to revive this option of imposing an R&D cess, an internal department note said. This is part of a 14-point strategy, which the department of telecom (DoT) is advocating to transform India to a telecom manufacturing hub.

“It is estimated that the requirement of telecom equipment would be over Rs 500,000 crore till the year 2015,” the department’s internal note said, adding, “However, despite the growth of market many folds, share of indigenous equipment has fallen down from 74% in 2003-04 to 30% in 2008-09.”

Some of the 14-point turnaround strategies have been implemented over the past few months. For instance, last week, the government issued a directive mandating foreign gear makers to manufacture core telecom equipment locally or mandatorily transfer technology to Indian manufacturers within a three-year period.

Another reason for the indigenous push for telecom network equipment relates to the security threat posed by imported hardware. The home ministry had repeatedly warned that equipment vendors may install back-door entries, remote logic facilities and also design Trojan horses in networks and hardware they sell here. These could be used to remotely bring down the network or monitor the voice and data traffic on it, security agencies say.

To counter this threat, last month, the Centre armed itself with powers to seize imported telecom network equipment that failed to pass security tests. In December 2009, the telecoms department directive said all telecoms network equipment and related hardware must pass security test before deployment.

Finance minister Pranab Mukherjee, in his budget last month, allotted resources for building a national test to scrutinise all imported telecom networks equipment before they can be installed here.

The test lab and security clearance for all imported equipment were also part of the DoT committee note to promote indigenous manufacture. Other measures include rationalisation and reduction of the existing tax structure to ensure procuring locally-manufactured equipment is more economical, tax breaks for service providers who source hardware manufactured in the country, easier loans and financing schemes for setting up telecom gear plants and providing soaps to companies that export telecoms equipment from India.

The DoT report adds that multinational telecom vendors were fiercely marketing their products here as markets in developed world were saturated.

“This is creating additional pressures in hindrance of development of indigenous manufacturing. Indigenous steps to catch up are further nullified by the rapid developments in technology. Hence holds steps have to be taken...,” the DoT note said.

It also warns that Intellectual Property Rights (IPRs) for the software developed by Indians were not used by them, but are begin sold back to the country.

[me_saket 73]

bad news,

govt also trying to ern with 560mn

[kcvvenkit 1]

From Feb-09 service tax + education cess is 10.24% instead of 12.36% earlier. So we will be loosing the benefit that we were enjoying for the last 14-15 months.

[rbdhoot 11]

Time to go prepaid.

[KanagaDeepan 1,084]

Yes, in Prepaid, we can escape on these blood-$ucking S.T. & Cess by recharging only during FullTT and HyperTT offers...

[kcvvenkit 1]

In Prepaid also there is service tax. But sometimes they may offer extra talktime.

If there is no extra talktime then postpaid is better because We are paying for calls only after a minimum of 15 days and max of 45 days.

[Dj 25]

From Feb-09 service tax + education cess is 10.24% instead of 12.36% earlier. So we will be loosing the benefit that we were enjoying for the last 14-15 months.

correct me if i am wrong, but what about SHEC... it works out to 10.30% = 10%ST + 2%EC + 1%SHEC

[KanagaDeepan 1,084]

No Venkit sir, we can escape ST in prepaid on doing FullTT recharges for eg:- Rs100TT for Rs100 recharge by RCom, Rs510TT for Rs510 recharge by vodafone...

[srk006 21]

Is this R&D cess on the total charges or just on the service tax component.

[me_saket 73]

@venkit,

There is absolutely no benifit if u pay Rs5 call after 45days,

Assuming u make call worth Rs5/day.

better to go for FULL TT

[kcvvenkit 1]

From Feb-09 service tax + education cess is 10.24% instead of 12.36% earlier. So we will be loosing the benefit that we were enjoying for the last 14-15 months.

correct me if i am wrong, but what about SHEC... it works out to 10.30% = 10%ST + 2%EC + 1%SHEC

You are perfectly correct boss. it is 10.3% and not 10.24

No Venkit sir, we can escape ST in prepaid on doing FullTT recharges for eg:- Rs100TT for Rs100 recharge by RCom, Rs510TT for Rs510 recharge by vodafone...

You can escape But the Extra talk time has some condition Like has to be used within 7 days and Cannot be used in roaming etc. In the case of Reliance Dont know about Vodafone

[kcvvenkit 1]

@venkit,

There is absolutely no benifit if u pay Rs5 call after 45days,

Assuming u make call worth Rs5/day.

better to go for FULL TT

It depends on Individual to Individual. I dont have to keep a balance in my mobile everytime when I need to call. We have to pay the bill only after 45 days. And if u r using credit card for that u will get some bonus points as well as u will get around 40 days more to pay the bill. That is for calls making today u r paying cash only after 60-70 days.

Now from April 1st Banks are giving interest on per day basis. So u will get the interest for the money for 60 days.

[KanagaDeepan 1,084]

Agreed sir... Even then, whatever may be the bank interest (even FD type forward sweep SB account) for 60 days, it can never be higher than upcoming 12.36% tax rate, benefit given by FullTT recharges of prepaid, let alone HyperTT recharges with extra FREE 10 to 15% TT...

[ramtech 47]

For POst paid connection with platinum 225 and 99 onnet pack I used to get Rs.365 min bill.Now converted to prepaid , with special 80Rs(200mins) and 40rs(200R-R mins) i am paying less than 250rs so I was paying 45% more with postpaid. so now a days prepaid is far better than postpaid.YOu have all benefits , special offers with prepaid.

[me_saket 73]

Only prolem is rcom closes and open new scheme everytime, but in postpaid ur plan continues

[Honest 836]

Postpaid is only useful if you have some special RETENTION plan from your service provider otherwise Prepaid is much better.

Aur kuch nahi mila toh Ab yeh "R"and"Dee" Cess laganey ki soch rahe hain.

[::Hitesh:: 1,763]

Only prolem is rcom closes and open new scheme everytime, but in postpaid ur plan continues

this is a good point in Postpaid !!!

[rbdhoot 11]

I am on postpaid just because of SRP200 plan & using the phone only for r-r calling.