The department of telecommunications' attempt to cash in on the growing usage of internet services has not gone down well with the industry.
Miffed at a rise in annual licence fee on Internet service providers, industry body Internet Services Providers Association of India on Thursday said it would approach the Telecom Disputes Settlement Appellate Tribunal, challenging the new fees.
"We will file a petition at TDSAT for quashing DoT's move to levy additional charges on ISPs.
"This is a disaster. An increase of seven per cent of the annual licence fee would have a cascading effect and would lead to an effective fee of 21-28 per cent as smaller ISPs would be taxed multiple times," said Rajesh Charia, president of ISPAI.
DoT has decided to levy a four per cent licence fee on ISPs from July 1. The ISPs at present do not pay any licence fees.
A draft of the amendment to the licence fee says: "A uniform licence fee of eight per cent of the adjusted gross revenue shall be adopted for all ISP and ISP-Internet Telephony (IT) licences, in two steps starting from July 1".
While ISPs (without IT) will have to pay four per cent from the current zero duty starting July 1, the fee on ISP-IT