Telecom service tax revenue booming on back of record subscriber growth

23 Apr 2007

According to Associated Chambers of Commerce and Industry of India, the service tax contribution from the telecom sector to the exchequer is likely to more than double to USD3.8 billion by 2010. However, as an overall proportion of the country’s total service tax revenue, the contribution made by the telecoms sector is set to fall; in 1996-97 telecom-based service tax stood at 48% of the total, and by 2010 it is expected to decline to less than 15% of the total.

In a separate but related story, the Telecom Regulatory Authority of India (TRAI), reports that the country’s total customer base grew by 66.5 million users in the financial year ended 31 March 2007, taking the total fixed and mobile subscriber base to 206.8 million. The increase in users is the highest during a financial year since 1994 when private sector companies were allowed to offer services. In the previous financial year, ending 31 March 2006, 41.91 million users were added.