The cost of accessing Internet is not fixed by the government but it has decided to impose 8 percent as licence fee on all internet service providers which would promptly reflect in consumers’ bills. This is in addition to the service tax which is already at 14 percent now.
The tariff for internet services are governed by the Telecom Tariff Order(s) issued by Telecom Regulatory Authority of India from time to time. To be known as “Adjusted Gross Revenue(AGR)” on all Internet Service Providers in phased manner, in two steps starting from July 2012, it would increase the government coffers by taxing the 300 million Internet users in the country.
This decision for imposing Uniform Licence Fee for various Telecom Service Providers was taken in the interest of ending arbitrage in the licence fee, ensuring simplicity and transparency, expanding licence fee base and ensuring a level playing field between different services, with due consideration of the revenue receipts of the Government and the growth of Telecom services in the country, said the government in a statement.
Milind Deora, the minister of State in the Ministry of Communication and Information Technology defended the move while replying to a question in Lok Sabha.