| IMPLICATIONS BEFORE AND AFTER 2011 | ||||||
 BROADBAND!TAX CHARGED!ON BROADBAND BILLS | ||||||
| Before 01/01/2011 | Change (%) | After 01/01/2011 | ||||
|---|---|---|---|---|---|---|
| Percentage(%) | Amount | Percentage(%) | Amount | |||
| Broadband Bill ( Assume Rs 100 monthly) | N/A | 100.00 | N/A | N/A | 100.00 | |
| Environmental Conservation Levy(ECL) | 0.0 | 0.00 | N/A | 0.0 | 0.00 | |
| Nation Building Tax (NBT) | 3.0 | 3.09 | (3.09) | 0.0 | 0.00 | |
| Mobile Subscriber Levy (MSL) | 0.0 | 0.00 | N/A | 0.0 | 0.00 | |
| Value Added Tax (VAT) | 12.0 | 12.37 | (12.37) | 0.0 | 0.00 | |
| Cess Fees (CESS) | 0.0 | 0.00 | 2.04 | 2.0 | 2.04 | |
| Telecom Levy (TEL) | 0.0 | 0.00 | 20.41 | 20.0 | 20.41 | |
| Total Tax | N/A | 15.46 | 6.99 | N/A | 22.45 | |
| Total Monthly Bill | N/A | 115.46 | N/A | N/A | 122.45 | |
| Effective Tax Rate | 15.46 | N/A | 6.99 | 22.45 | N/A | |
Effect on Private Users
The total tax bill (Based on Rs 100 bill) has risen by 6.05% from Rs 115.46 to Rs 122.45. As a result, private customers are adversely affected.
Effect on Business Users
If you were a business user, who has been registered for VAT with the department of Inland Revenue for claiming the input VAT, you would have claimed input VAT of Rs. 12.37 before 1st Jan 2011 giving an effective reduced business outgoing of 103.09. However, after 1st Jan 2011, there is no VAT element included in the telecom levy and therefore, there is no input element of VAT that can be claimed by businesses. As a result, the total business outgoing is now Rs 122.45, which is a 18.78% increase from the previous total of Rs.103.09. Overall, this new levy/tax has adversely affected the business users.
Also read the tax implications on Broadband, Fixed Lines, Mobiles and Calling Cards