Telecom cess buzz to fund clean drive

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By The Telegraph Online
  • Published 21.01.15

New Delhi, Jan. 20 (PTI): Phone and Internet bills are likely to go up if the government imposes a cess on telecom services to create a corpus to fund the "Swachh Bharat" drive.

In a legal advice to the department of telecom (DoT), the attorney-general of India has said that the government should not levy the Swachh Bharat cess on spectrum as that would be illegal. Instead, it could impose the cess on telecom services by amending the finance act.

"The attorney-general had said it was not possible for the DoT to levy the cess for the purpose of Swachh Bharat by way of an executive order. It will need legislative backing and imposition of tax/cess is strictly construed," an official source said.

The DoT had asked the attorney-general if it was legally tenable to impose a Swachh Bharat cess on spectrum use charges - a fee paid annually by the telecom operators - through an executive order under the Indian Telegraph Act. However, without a legislation, the impost would be without authority of law and it would be contrary to Article 265 of the Constitution, the attorney-general has opined.

On the DoT's query on whether the Swachh Bharat cess can be imposed like the education cess on telecom service, the attorney-general replied in the positive.

"The attorney-general felt that since telecom service was a recognised service and covered by the finance act, on which service tax, education cess and higher education cess was currently levied, it would be appropriate to amend the finance act and include a third kind of cess," the source said.

Former telecom commission member Sadhna Dixit said, "A large number of people can take pride in contributing to the project (Swachh Bharat). However, telecom operators will pass on this cess on to consumers without distinguishing a poor man from others, specially when we are talking about affordability," Dixit said.

Telecom industry association COAI has opposed the cess. "It will burden consumers and will be against the government's agenda of providing affordable service," COAI director- general Rajan S. Mathews said.