In a bid to increase broadband penetration, the Department of Telecommunication ( DoT) has recommended to the Ministry of Finance to abolish service tax on pure internet/broadband services in the next Budget to make it affordable for the end users.
The high cost of internet, which currently attracts a 12% service tax in line with other telecom services, is one of the reasons for slow growth of this essential service within the country, DoT said in its recommendation for Budget 2013.
DoT has set a target for 175 million broadband users in the country by 2015.
There are just 14.88 million broadband users in India at the end of November 2012, according to data published by Telecom Regulatory Authority of India (TRAI).
On the other hand, DoT has recommended that value added services (VAS) should attract service tax as it needs to be treated as supply of service.
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