What is the GST Rate for Broadband

Pre-GST, telecom services were levied a service tax of 14% along with a Swachh Bharat cess of 0.5% and a Krishi Kalyan cess of 0.5%, totalling 15%. However, with the GST regime going live on 1^st July 2017, telecommunication services, including broadband services, were classified into a higher tax slab. As a result, the GST rate for broadband services now stands at 18%. Below we elaborate on the applicability of GST for broadband connections and internet service providers (ISPs).

Applicability of GST for Broadband Services

Presently, the Indian telecom sector is classified into three segments:

• Telecom Service Providers
• Infrastructure Providers
• Equipment Manufacturers

Broadband services fall under the ambit of telecom service and infrastructure providers.

As per Section 2(110) of the CGST Act, 2017, a ‘telecommunication service’ is defined as:

“The service of any kind (including electronic mail, data services, voice mail, audio text services, video text services, cellular mobile telephone services, and radio paging), made available to users by way of any transmission or reception of writing, signs, signals, sounds and images or intelligence of any nature, by radio, wire, visual or other electromagnetic means.”

Scope of Internet Broadband

Furthermore, internet telecommunication services comprise the following:

• These include internet backbone services, such as carrier services of internet traffic by one Internet Service Provider (ISP) to another ISP. [Peering and transit charges]
• These include internet access services, including the provision of a direct internet connection and space for the customer’s web page.
• These also include the provision of telecom services over the internet, like telephony, fax, audio conferencing, and video conferencing.

Place of Supply

The applicability of GST for broadband services, which form a part of telecommunication services, is contingent on the place of supply. The inter-state supply of broadband services, i.e., when the buyer and the supplier are located in different states, attracts the levy of an IGST on internet broadband. But when both the buyer and supplier are in the same state, also known as  intra-state supply, both CGST and SGST will be levied on broadband services.

Section 12(11) of the IGST Act, 2017 states that the nature and place of supply for broadband services and internet service providers are summarised as under.

GST Rate and HSN Code for Broadband Services 

The applicable GST for broadband services is 18%. These services fall under the HSN code 9984. Similarly, the ISPs are levied a GST rate of 18%.

Furthermore, the SAC code for internet telecommunication services is 99842, which deals with carrying electronic signals over the internet. Internet backbone services and internet access services fall under 998421 and 998422, respectively.

Internet access services provide a direct narrowband and broadband connection to the internet through wired, wireless, satellite, or terrestrial means. The ISP can also club together other free services, such as e-mails, web page design tools, chats, security software, etc., and internet access. It also incorporates package upgrades, such as international roaming and remote access to the internet within its remit.

Availability of ITC for Internet Service Providers

Under the GST regime, telecom providers, including ISPs, can claim ITC or input tax credit on all the inputs and input services utilised in the course of or the furtherance of their business. Telecom service providers can also avail of the credit of IGST paid on domestic and imported goods.

Since the GST regime's implementation, telecom providers have had to bear a higher tax liability, which has worsened their overall finances. Similarly, consumers are liable to pay more (a 3% margin) for using the same broadband services.

FAQs on GST for broadband

How much is GST for broadband connection/services?

The GST rate for broadband services in India is 18%.

How much is GST for Airtel broadband?

The applicable GST rate for an Airtel broadband connection is 18%.

How much is GST for BSNL broadband plans?

BSNL broadband plans attract a GST rate of 18%.

How much is GST for an internet service provider?

An internet service provider’s services fall under the 18% GST slab.

How much is the GST for Asianet broadband?

The GST for Asianet broadband is 18%.