Public WiFi hot spots could mushroom with the government planning to lift an existing prohibition on the resale of internet data, a person aware o the mater said. The department of telecommunications (DoT) is planning to issue an order within a month allowing such resale without double taxation, this person said on condition of anonymity.
“Right now, a virtual network operator (VNO) or his equivalent public data office aggregator buys bulk bandwidth (from a telecom service provider, or TSP). The TSP is paying 8% (licence fee), this person (VNO) is also paying 8%. So, we will now move to the GST principle of value addition, where you will be taxed only on value addition. So, if he invests in infrastructure and other things, he will be able to claim input tax credit for the bandwidth,” the person cited above said. A VNO buys bulk bandwidth or talk time from a telco or an internet service provider and utilizes it to sell its own branded services to consumers. It does not own either spectrum or network infrastructure. VNOs pay a licence fee and spectrum usage charges in addition to the required entry fee. The new rules could also help struggling state-run telcos such as Bharat Sanchar Nigam Ltd, or BSNL, and Mahanagar Telephone Nigam Ltd, or MTNL, monetize excess unused capacity on their networks.