The Central Board of Revenue (CBR) has reduced activation charges on mobile phone connections from Rs 1,000 to Rs 500 per connection. In the last budget, activation charges (composite of customs duty and sales tax) on cellular phones were reduced from Rs2,000 to Rs1,000. This measure encouraged use of cellular technology in telecommunication sector and resulted in revenue growth of nearly 40 percent.
Therefore, it has been proposed to further reduce the rate of activation charges to Rs.500. This will enhance revenue due to increase in the receipt of airtime charges by cellular phone companies.