The Union Budget 2006-07 has imposed no fresh taxes, and income and corporate tax rates have not been changed. However, service tax has been raised from 10 per cent to 12 per cent, which translates into higher bills for consumers. The telecom industry’s revenues, as a result of the total service tax paid, will increase to an estimated Rs 108 billion. Little has been offered to telecom equipment manufacturers, barring a reduction in import duties on plastic to 5 per cent from 10 per cent and on metals to 7.5 per cent from 10 per cent. There will also not be any ITA countervailing duty (currently 4.02 per cent) on handset imports. This means the price of handsets should fall by about 4 per cent.
