Charging GST on Telecom services from 1 May

Pursuant to the First Amendment brought to the Goods and Services Tax (GST) Act on 6 February 2014, previously exempt telecommunication services will be subject to GST from 1 May 2014.

As such, if a GST registered person is providing a telecommunication service after 1 May 2014, they are required to charge GST on the value of the service. If the place of service is one providing tourism sector goods and service, then GST must be charged at 8% and if it is general sector, GST has to be charged at 6%. Telecommunication services subject to GST include phone cards, internet service, post-paid service, SMS package and other value added services.

GST on telecommunication service is not charged on each and every instance of usage. GST is charged at the point of payment. Meaning GST has to be paid on phone cards at the point of buying the card and in the case of postpaid, GST amount will be added to the final monthly bill. 

30 Apr 14