Swachh Bharat cess may increase telephone, internet bills

New Delhi:  Phone and internet bills may go up as the government plans to levy a cess on telecom services to create a corpus to fund the Swachh Bharat drive.

In a legal advice given to department of telecom, the attorney general is learned to have argued against levying Swachh Bharat Cess on telecom spectrum as it would be illegal. But it can be imposed on telecom services by amending the Finance Act, he has suggested.

"AG has said that it is not possible for the DoT to levy the 'cess' for the purpose of Swachh Bharat Kosh by way of an executive order. It will need legislative backing and impost of tax/cess is strictly construed," an official source said.

The DoT had sought the AG's advice on whether it would be legally tenable to impose 'Swachh Bharat Cess' on spectrum usage charges — a fee paid annually by telecom operators — through an executive order under the Indian Telegraph Act. The AG opined that without a legislation to back it, the cess would be without authority of law and contrary to Article 265 of the Constitution.

The legal opinion, however, was positive to query of the DoT if Swachh Bharat Cess can be imposed like education cess. "The AG in his opinion stated that since Telecom Service is a recognized service and covered by the Finance Act on which service tax, education cess and higher education cess is currently levied, it would be appropriate to amend the Finance Act and include a third kind of cess," the source said.

Telecom industry body COAI has opposed the cess. "We are not in favour of it. It will burden consumers and will be against government agenda of providing affordable service specially when it is talking about increasing rural broadband and internet penetration," COAI director general Rajan S Mathews said. "It is not an easy exercise for us either. We will need to work out tax on calls per minute and make technical changes in networks," he said.